Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

KING'S SPEECH (ANSWER TO ADDRESS)

The VICE-CHAMBERLAIN of the HOUSEHOLD (Captain SNOW) reported His Majesty's Answer to the Address, as followeth:

I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I have opened the present Session of Parliament.

Oral Answers to Questions — NATIONAL SERVICE

Agricultural Students

Mr. Hale: asked the Minister of Labour if he will defer the call-up of young men now gaining practical experience on farms whilst awaiting entry to agricultural colleges and thus enable them to complete their normal college course.

The Minister of Labour (Mr. Isaacs): I would refer my hon. Friend to the reply given to the hon. Member for Northern Norfolk (Mr. Gooch) on 18th November.

Mr. Hale: Is the Minister aware that notwithstanding the unequivocal undertaking given to the hon. Member, one Ministry rules that such men can only be deferred if accepted by an agricultural college, and another Ministry rules that no agricultural college can accept them? Will he look into this matter further?

Mr. Isaacs: Yes, Sir, and I shall be glad to receive any particulars which will help me to straighten it out.

Cadet Forces

Mr. David Renton: asked the Minister of Labour whether efficient service with the Sea Cadets, Army Cadet Force, or the A.T.C. will be counted wholly or partly towards the period of service to be performed in the Territorial auxiliary or reserve forces under the proposed arrangements for National Service.

Mr. Isaacs: I would ask the hon. Member to await the Bill.

Call-up, 1947

Mr. Granville Sharp: asked the Minister of Labour if he will give an estimate of the number of men who will be called up for service with the armed forces during 1947; the number of these whose service will have been deferred; and the corresponding figures for 1946.

Mr. Isaacs: I estimate that in 1947 there will be called up 140,000 men born in 1929 and 35,000 born in earlier years and whose calling-up was deferred. The corresponding figures for 1946 are approximately 145,000 and 110,000 respectively.

Oral Answers to Questions — EMPLOYMENT

Catering Trades

Mr. Arthur Lewis: asked the Minister of Labour if he is aware that catering trade employees, being unable to obtain employment through the employment exchanges, are compelled to pay high fees to private employment agencies to obtain work; and why, when private agencies are able to find employment, his Department is not able to do so.

Mr. Isaacs: My hon. Friend is under a misapprehension. The employment exchanges find employment for many thousands of persons in the hotel and catering trades and have a large number of vacancies on their books.

Mr. Lewis: Is the Minister aware that I can give him many instances where catering workers who have gone to the Denmark Street exchange could not find employment, but on paying a fee to a private agency have been placed in a job immediately?

Mr. Isaacs: I should be glad to have any such particulars, because according to my information, in the three months


ending 7th August, we placed no fewer than 17,896 in the catering trades, and at that time we had vacancies for 15,007.

Mr. Lewis: Is it the policy of the Government to tell the employers to find labour through the Ministry's exchanges rather than through private ones?

Mr. Isaacs: That is another question.

Mr. A. Lewis: asked the Minister of Labour if he is aware of the malpractices adopted by many of the catering trade employment agencies; what steps he is taking to prevent these malpractices; and whether he will consider appointing a committee of inquiry to consider the abolition of these catering trade agencies.

Mr. Isaacs: The Catering Wages Commission have announced their intention of undertaking an inquiry under Section 2 of the Catering Wages Act, 1943, into the organisation and work of employment agencies serving the catering industry and have invited observations from interested organisations and persons. I must await the results of this inquiry before considering whether any action is required.

Peat Industry

Sir William Darling: asked the Minister of Labour how many men are employed in Scotland and Great Britain in the peat industry; and what are the possibilities of creating employment in rural districts in connection with the industry.

Mr. Isaacs: Information as to the number of men employed in this industry is not available. As to the second part of the Question, I am informed by my right hon. Friend the Minister of Fuel and Power that a survey of peat sites which could be worked on an economic basis is at present being carried out, but it is not considered that this can be expected to provide more than a limited amount of additional employment in particular localities.

Sir W. Darling: May I take it that the Minister will have in mind that there are over 70,000 men and women unemployed in Scotland, and that there is a shortage of fuel?

Mr. Isaacs: Yes, Sir, but we do not expect to find all of them jobs digging peat.

Mr. Wilson Harris: Will the Minister prevent the peat sites of Dartmoor from being interfered with by the military?

Hostel, Cheltenham (Complaints)

Mr. Lipson: asked the Minister of Labour if he has considered the statement sent to him describing the unsatisfactory conditions, due to bad management, at the Brockworth Hostel, near Cheltenham, where, approximately, 1,000 workers from South Wales are housed; and, as these are affecting the supply of labour for the factory of Messrs. A. W. Hawksley, Limited, engaged in producing aluminium houses, if he will hold an inquiry into the complaints of the men, which are supported by the management of Messrs. A. W. Hawksley, Limited, with a view to remedying the grievances of residents in the hostel.

Mr. Isaacs: I have considered the statement sent to me by the hon. Member. I have made inquiries and am satisfied that there are no grounds for the complaint about feeding conditions although there is pressure at meal times owing to the large number of residents at the hostel; this would be substantially eased if the hours of work of the residents were staggered. As regards the need for redecoration, it is not possible without detriment to other more urgent work to do more than is absolutely essential. I have had no specific complaints from the firm mentioned, and I can assure the hon. Member that the conditions at this hostel have been under constant review.

Mr. Lipson: May I ask the right hon. Gentleman who conducted this inquiry? Will he have an impartial inquiry by Members of the House or by somebody else, because the conditions are serious, and they are affecting the supply of houses by this firm, whose management and men will receive the Minister's reply with disappointment?

Mr. Isaacs: I wish it were possible at Question time to go more fully into this matter, but this hostel has been under very constant attention and review over many weeks—

Sir Waldron Smithers: By whom?

Mr. Isaacs: Not by you, at any rate. [Interruption.]I will correct myself by saying Not by the hon. Gentleman on


the Back Bench. "There has been a considerable amount of worry about this place, as another Question on the Order Paper shows. It is not so much a question of the residents being dissatisfied. The mischief is really caused by one individual.

Mr. Lipson: In view of the unsatisfactory nature of the reply, I wish to give notice that I shall raise this matter on the Adjournment at the earliest possible opportunity.

Mr. Parkin: asked the Minister of Labour what complaints have been made by the residents committee of Brockworth Hostel, near Gloucester; and what action has been taken.

Mr. Isaacs: Complaints by such committees would normally be addressed to the National Service Hostels Corporation and dealt with through a recognised procedure for consultation between such committees and the management. I understand that there is at present no elected residents committee at the hostel concerned owing to the unwillingness of residents to serve. In the circumstances the manager has nominated a committee with whom he is working.

Dock Workers, Newport

Mr. Peter Freeman: asked the Minister of Labour what steps are being taken to provide work for dock workers at Newport, in view of the increasing number of unemployed at this port.

Mr. Isaacs: During the past three months 26 dock workers have been discharged from Newport Docks on account of redundancy. Of these, 13 registered for employment at the Ministry's local office and every effort is being made to place them in alternative work.

Mr. Freeman: Can my right hon. Friend tell us whether many others are out of work in Cardiff docks? Is he aware that while the Government have still power to direct boats to Newport not one vessel has been directed to Newport since the war terminated?

Mr. Isaacs: I must admit that I had a doubt whether the hon. Gentleman's Question was directed to that aspect of the matter; that is a point which should be -addressed to the Ministry of Transport which has to do with directing vessels.

Unemployed Building Workers

Mr. Gammans: asked the Minister of Labour how many men in the building industry were registered as unemployed at the last date when returns were made.

Mr. Isaacs: At 14th October, the number of insured men aged 16 and over in the building industry registered as unemployed in Great Britain, was 16,644.

Mr. Gammans: How does the Minister reconcile this appalling waste of manpower with some of the statements recently made by the Minister of Health to justify his failure in housing progress?

Mr. Isaacs: The figures are taken on Monday, and 60 to 70 per cent. of the craftsmen who sign on as unemployed on Monday are placed in employment before the end of the week. It is a constant going in and out. As far as the unskilled men are concerned, 4,760 are fit for light work only, and although they are registered under the building scheme they are not really available for building work. In that case also 15 to 20 per cent. of the registrations on Monday are placed in employment by the end of the week.

Resettlement Scheme

Mr. A. Edward Davies: asked the Minister of Labour how many applications have been received for training under the Resettlement Scheme; how many accepted; and if he will state the number still awaiting training, giving details on a trade and industry basis.

Mr. Isaacs: Excluding applications made and subsequently withdrawn by the applicant, 138,490 applications have been received for training under the Vocational Training Scheme, of which 106,767 have been accepted. Of these 31,854 are awaiting allocation to training. As the details by trades require a long list, I am sending particulars to my hon. Friend.

Mr. Davies: Whilst "appreciating the progress which has been made, may I ask whether the other 30,000-odd are likely soon to be taken into the schools?

Mr. Isaacs: They will be taken in as soon as we are able to get ahead with the necessary building of the premises which we need to occupy.

Disabled Persons, Durham

Mr. Lavers: asked the Minister of Labour what arrangements he has in mind


for the training of the 4,540 unemployed disabled persons, male and female, who are registered at the present time in the county of Durham.

Mr. Isaacs: Only a proportion of the number quoted need training, which is provided at six Government training centres, a special residential training centre, technical colleges and employers' establishments. 769 severely disabled will have their need for training met by the establishment in 1947–1948 of three factories under the Disabled Persons Corporation at Durham, Chester-le-Street and West Hartlepool. If necessary further factories will be established.

Mr. Lavers: I wonder if the Minister is aware of the general feeling in County Durham, which carries more than 50 per cent. of the total disabled, that the training has been bungled and muddled by incredible delays on the part of his Department, and that his statement will allay the fears of those who rendered such first-class service in this country in both an industrial and a military capacity?

Mr. Isaacs: I hope also that the statement I have made will do something to allay the misconceived statements which must have been circulated about this matter.

Captain MacLeod: Can the Minister say if firms which are prepared to employ disabled ex-Servicemen will get priority in machinery which they may require to employ these men?

Mr. Isaacs: I have no authority about the allocation of machinery, but as far as employers are concerned, it is right to say that in the main throughout the country they generously come into line and accept their quota of disabled workers.

Unemployed Shipbuilding Workers, Scotland

Mr. Spence: asked the Minister of Labour how many unemployed workers there are in Scotland in the shipbuilding industry.

Mr. Isaacs: 3,706 at 14th October, the latest date for which figures are available.

Mr. Spence: Is the Minister aware that these men are unemployed because of the shortage of raw materials, including sheet

steel, and will he say what are the representations he has made to the other Ministers to see that their export is restricted in order to provide employment?

Mr. Isaacs: We are aware that this and some other unemployment is due to shortage of raw materials, but the matter is actively being pursued between the Ministers concerned in an effort to find a remedy.

Captain Crookshank: As in the case of Question No. 8, is this count taken on Monday, and if so why is the same excuse not given here?

Mr. Isaacs: Because in this instance the men have remained unemployed and there was no need to give a reason which the right hon. and gallant Gentleman has now twisted into an excuse.

Mr. Kirkwood: Is the Minister aware that there is five times the amount of unemployment in Scotland that there is in London and the South of England?

Hon. Members: Answer.

Mr. Isaacs: The point is that there is a shortage of labour in London and there is a surplus of labour in Scotland. There is, of course, a well known way of filling these London vacancies but there is some hesitation in introducing compulsory transfer.

Several Hon. Members: rose—

Mr. Speaker: We cannot pursue this any further. Supplementary questions are meant to seek information, but here they are giving information.

Sir W. Smithers: It is a futile reply.

Bricklayers

Mr. Lyne: asked the Minister of Labour the total number of bricklayers available for civilian employment in England and Wales; and the number of men in this category still serving in His Majesty's Forces.

Mr. Isaacs: The estimated number of bricklayers in employment in the building and civil engineering industries in England and Wales at the end of October was 93,000. The number still serving in the Forces is about 6,400.

Oral Answers to Questions — SCOTLAND

Ex-Secretaries of State Council

Sir William Darling: asked the Secretary of State for Scotland when the last meeting of the Council of Former Secretaries of State for Scotland was held; and if, in view of the needs of Scotland, he will consult the council at regular intervals in the future.

The Secretary of State for Scotland (Mr. Westwood): The last meeting of the Council of ex-Secretaries of State took place on 16th February, 1945, during the Coalition Government. Its retention among the bodies to which I, as Secretary of State for Scotland, can look for advice would not appear to be appropriate in the absence of such understanding between parties as obtained during the war years, and I do not intend to reconstitute such a council as one of my advisory bodies.

Sir W. Darling: Does the right hon. Gentleman think that his administration of Scotland is so successful that he can dispense with the advice and counsel of experienced men?

Mr. Westwood: There is no statutory duty upon me to appoint ex-Secretaries of State for Scotland as my advisers, and I believe that outside their ranks there are just as intelligent individuals to give me advice as among those who are ex-Secretaries of State.

Members of Parliament (Consultation)

Sir W. Darling: asked the Secretary of State for Scotland what plans he has for regular consultation with all Scottish Members at Edinburgh; and if, in particular, he will arrange for an early meeting to consider, with the Minister of Labour, the unemployment situation in Scotland.

Mr. Westwood: I am always prepared to meet Scottish Members, as can suitably be arranged either in Edinburgh or London, whenever there is any indication of a general desire for such a meeting and when it is clear that the opportunity so provided of informal discussion would be advantageous in dealing with any particular Scottish problem.
With regard to the second part of the Question, I am in constant touch with

my right hon. Friends the President of the Board of Trade and the Minister of Labour on the employment situation in Scotland; and I should of course consult them about any proposal made to me through the usual channels.

Mr. Gallacher: In view of that reply, may I ask the Secretary of State if he will arrange an early meeting of the Scottish Members in Edinburgh to discuss the question of unemployment in Scotland and to prepare a resolution for submission to the Government?

Commander Galbraith: Is the right hon. Gentleman aware that in view of the Parliamentary programme it would be more convenient if such matters were referred to the Scottish Grand Committee?

Mr. Westwood: I am not aware of that, but I am aware that it would be of interest to Scottish Members to meet informally to discuss particular problems affecting Scotland in the same way as they did under my predecessors. As I have already said, if there are representations through the usual channels I am prepared to consider them.

Sir W. Darling: Do I understand from the right hon. Gentleman that the initiative in this matter must come from Scottish Members and not from him?

Mr. Westwood: I require to discover through the usual channels any particular subject they wish to discuss with me so that I may have an opportunity to see that the appropriate officials are present and that expert advice is available.

Mr. McGovern: Is the right hon. Gentleman aware that the opinion of certain hon. Members is that most of the meetings in Edinburgh were a waste of time and money, and does he not think that if there are to be discussions they should be held in London, which is much more convenient than calling hon. Members to Edinburgh?

Baltier Farm, Wigtownshire

Mr. McKie: asked the Secretary of State for Scotland if he is now prepared to reconsider the case of Mr. Hill Baltier, Whithorn, Wigtownshire, against whom proceedings were instituted by the Department of Agriculture for Scotland.

Mr. Westwood: As the hon. Member has been informed in correspondence and in


reply to his Question on 5th April, after the fullest inquiries, I can find no ground for intervening in this case.

Mr. McKie: Is the right hon. Gentleman aware that two members of the agricultural executive committee concerned admitted to Mr. Hill that the additional ploughing quota levied for the year in dispute arose from the fact that the penalty imposed upon him in Wigtown Sheriff Court was, in their judgment, too light, and will he therefore now be prepared to reconsider this question?

Mr. Westwood: In view of all the facts which have been brought to my notice, and which I have endeavoured to place before the hon. Member—who has been very persistent in the interests of his constituent, for which I do not blame him —I am not prepared to reconsider this case.

Hill Cattle Subsidy

Mr. Snadden: asked the Secretary of State for Scotland if, in consequence of the passing into law of the Hill Farming Act, he will now announce long-term provisions for hill cattle schemes.

Mr. Westwood: I am not yet in a position to lay before Parliament a scheme for the payment of subsidy for cattle kept on hill land, in terms of the Hill Farming Act. Discussions with the interests concerned will be necessary before such a scheme is prepared.

Mr. Snadden: Does that mean that the right hon. Gentleman is considering announcing a long-term policy in the future?

Mr. Westwood: We are having discussions with the interests concerned which take some little time to carry through. The Act referred to has only recently been placed on the Statute Book and I am anxious to carry the various interests with me.

Water Scheme, Grangemouth

Mr. Mathers: asked the Secretary of State for Scotland whether he has taken any action on the application by Grange mouth Town Council for approval of their water scheme upon which depends the provision of employment for 1,000 workers in the area through the extension of the I.C.I. factory; and whether he will make a statement.

Mr. Westwood: Yes, Sir. On 31st October—the day after I was informed of the result of negotiations betwen the town council and the Stirlingshire and Falkirk Water Board—I informed the town council that I agreed in principle with their proposals and that, subject to my statutory duty to consider objections, I would be prepared to entertain an application for an order under the Water (Scotland) Act, 1946, conferring the necessary powers on the council. On 22nd November the town council replied that they proposed to make application for such an order.

Mr. Mathers: In view of the report that I.C.I. have placed a time limit upon giving a decision in regard to this matter, will my right hon. Friend use what powers he has to see that no delay takes place in dealing with the application?

Mr. Westwood: Evidence of that is contained in the answer I have given, which states that on the very next day after the receipt of the application instructions were given to the town council to go ahead.

Mr. Mathers: But the right hon. Gentleman will be aware that further steps have still to be taken?

Voters' Lists, Lanarkshire

Colonel J. R. H. Hutchison: asked the Secretary of State for Scotland whether he will take immediate steps to arrange for the publication of the registra-tration of voters in the divisions of Ruther-glen, North Lanark and Lanark

Mr. Westwood: I regret that work on the printing of the registers for the Parliamentary county of Lanark was delayed in consequence of the recent dispute in the printing trade. The burgh sections of the registers were published on 15th October. As regards the remainder, I am informed that delivery to the electoral registration officer will be completed by 27th November and that copies will be published in the usual places on the following day.

Colonel Hutchison: Will the Secretary of State assure himself that when these lists are made available there will be no curtailment of time within which objections, alterations, and examinations can take place?

Mr. Westwood: I will do my best to meet the point raised by the hon. and gallant Gentleman.

Information Office

Mr. Henderson Stewart: asked the Secretary of State for Scotland what is the function of the Scottish Information Office; in what respects it is the agent of the Secretary of State; who selects the panel of chairmen for the Sunday evening meetings run by the Information Office in Edinburgh; what are the terms of their appointment; and what instructions have been given to these chairmen regarding the admissibility of party political questions at the meetings.

Mr. Westwood: The functions of the Scottish Information Office are to provide the public through the Press and other channels with information about the work of my Departments. It also acts as agent in Scotland for the Central Office of Information as regards meetings and the distribution of documentary films made by that office. The chairmen of the Sunday meetings in Edinburgh act in an honorary capacity on the invitation of the director of the Scottish Information Office, and have done so for a number of years. They are instructed, in dealing with questions, not to accept any of a political nature.

Commander Galbraith: Can the Minister say how the expenses of these meetings are met?

Mr. Westwood: Not without notice.

Oral Answers to Questions — HOUSING (SCOTLAND)

Glasgow

Mr. J. L. Williams: asked the Secretary of State for Scotland whether his attention has been drawn to the increasing number of small houses in the city of Glasgow with a short expectation of life being kept vacant to be offered for sale; and what steps he proposes to take to protect inexperienced purchasers, in urgent need of shelter, against exploitation.

The Joint Under-Secretary of State for Scotland (Mr. Buchanan): Would-be purchasers must be guided by their own technical or legal advisers. It is indefensible, however, in the face of the clamant need for accommodation in Glasgow, that houses should be kept vacant for possible sale. Empty houses in all categories should immediately be brought to the notice of the corporation for consideration as to their suitability for requisitioning.

Mr. Williams: Is the hon. Gentleman aware that notwithstanding the provisions for requisitioning, it is common for such houses to remain vacant for periods of from two to four months, and that such offers are made in many cases in order to induce ex-Servicemen to part with their gratuities in exchange for property of very doubtful value?.

Mr. Buchanan: If houses are standing vacant I trust that this Question will draw the attention of the citizens to the fact. They ought not to be standing vacant, and my hon. Friend can take it that the Corporation of Glasgow are very much alive to their responsibilities in this matter.

Mr. McGovern: Is the hon. Gentleman aware that a number of single apartment houses of a slum character are being offered, in particular by one firm of house factors, Messrs. Spiers and Knox, who have declared that they will keep them vacant until they get their price for them? An exorbitant price is being demanded for these shameful types of house.

Mr. Buchanan: If there is a vacant house the corporation have the power to request the Secretary of State to requisition. If hon. Members or other citizens know of houses remaining vacant and will furnish me with the particulars I give an assurance that prompt action will be taken.

Colonel Sir Charles MacAndrew: Is the hon. Gentleman aware that if it were possible for these houses to be let for a short while after which the owner could be sure of getting them back this difficulty would not arise?

Mr. Buchanan: As I understand the situation in Glasgow, this type of house in a tenement has not commonly been sold hitherto in the same way as has the cottage type. The practice of selling such houses has increased since the war but what I am interested in is whether they are vacant. If they are, and I think they are at all desirable, they should not remain vacant any longer than necessary but should be taken over for human habitation.

New Abbey

Mr. McKie: asked the Secretary of State for Scotland if he will make a statement regarding the delay in the erection of council houses at New Abbey, Kirkcudbrightshire.

Mr. Buchanan: Tenders for this scheme of 12 houses were approved on 29th August. I am informed that because of labour difficulties the excavator and brickwork contractor has found it impossible to make a start. In view of these difficulties I have requested that the scheduling of the scheme under the Essential Work Order should be considered as a matter of urgency.

Private Enterprise Building

Mr. Willis: asked the Secretary of State for Scotland if he will take steps to have the figures for the additional houses provided by sub-division to be included in the monthly housing return for Scotland, under the heading Private Enterprise Permanent Houses.

Mr. Buchanan: I am arranging for the inclusion in the monthly Housing Return of a general note of the information asked for. I regret that it is impracticable to give detailed information for each local authority.

Edinburgh

Mr. Willis: asked the Secretary of State for Scotland if he is aware that, for the period 1st January, 1945, to 30thSeptember, 1946, Edinburgh Corporation had received approval for tenders for 2,081 houses; that, during the same period, licences had been granted for the provision, by erection and sub-division, of approximately 650 houses for sale; whether this is in accordance with the agreement reached between his Department and Edinburgh Corporation; and what steps he proposes to take to see that the Corporation's programme is accelerated.

Mr. Buchanan: The facts are broadly as stated in the first part of the Question. The understanding to which my hon. Friend refers relates to the issue of licences for the erection of new houses, 306 of which had been licensed by the corporation up to 30th September 1946. I am not aware that it has been departed from. As I stated in a reply to my hon. Friend on 29th October, the corporation have also imposed restrictive conditions on the issue of licences for conversion work. I have no evidence to suggest that progress on the corporation's own schemes is being retarded because of private building, but I shall continue to keep the position under close review.

Mr. Willis: Could my hon. Friend say whether he is now taking steps to see that the corporation increases its permanent programme, in view of the fact that this activity is causing great concern among people who want houses but who fear that their needs will once again compel them to accept responsibilities that they have no wish to accept, and cannot afford to accept in any case?

Mr. Buchanan: I went into this matter rather fully. I found that conversion is on a fair scale, but I could not find any evidence that it is retarding corporation building. With regard to the general progress of corporation houses, I am constantly in touch with the corporation. Anything I can do to help them to increase the number of houses I shall be glad to do.

Swedish Houses, Aberdeenshire

Mr. Spence: asked the Secretary of State for Scotland how many Swedish houses it is expected will be completed in Aberdeenshire by the end of the year.

Mr. Buchanan: All of the 32 Swedish timber houses under construction in Aberdeen county are roofed over and at an advanced stage and everything possible is being done to ensure their completion by the end of the year.

Mr. Spence: Could the Minister give an assurance that the necessary fittings and materials needed to complete the houses will be forthcoming?

Mr. Buchanan: These considerations do not apply only to the Swedish houses in Aberdeenshire. I have a special report on Swedish houses not yet completed in Scotland, with a view to action being taken to speed up the supply of components, &c. This week we have in Scotland a representative from the Ministry of Supply arranging for extra deliveries for the Swedish houses in particular.

Oral Answers to Questions — MINISTRY OF PENSIONS

Appeal Tribunals

Major McCallum: asked the Minister of Pensions if he will speed up the arrangements by which pension appeals submitted to the appeal tribunals can be heard; and if he will consider the appointment of more tribunals in view of the great hardship caused to the appellants by the long delay in arriving at decisions in these cases.

The Parliamentary Secretary to the Ministry of Pensions (Mr. Blenkinsop): Considerable progress has been made in disposing of entitlement appeals and those still outstanding will be dealt with as quickly as possible. Recent decisions of the High Court and Court of Sessions are, however, necessitating a more detailed statement of the Ministry's reasons for rejection and this inevitably affects the speed with which cases can be prepared. The appointment of tribunals is not the responsibility of my right hon. Friend, but I have no reason to think that the hearing of appeals is being held up owing to a lack of tribunals.

Major McCallum: Is the Minister aware that in Scotland in particular long delays take place before the appeals come before tribunals? One case in particular which I have referred to his Department from time to time has now taken two years. It has just come before the tribunal.

Mr. Blenkinsop: I am prepared to look into any cases of that sort to see whether a case can be made out for further tribunals. I would urge that it is not the responsibility of my right hon. Friend to deal with the actual setting up of these tribunals.

Conscript Personnel

Lieut.-Commander Clark Hutchison: asked the Minister of Pensions what steps he proposes to take to ensure that men who are conscripted under the new compulsory military service scheme and who suffer injury will become eligible for disability pensions; and what arrangements he will make to provide for a right of appeal in the case of rejected claims.

Mr. Blenkinsop: Men called up for compulsory service who are disabled in consequence of that service at present come within the scope of the war pensions instruments and have the right of appeal to the pensions appeal tribunal. The existing instruments cover cases arising before the date to be declared, for war pensions purposes, to be the end of the war emergency.

Lieut.-Commander Hutchison: But will the existing rules cover these cases when the new compulsory service legislation is introduced? That is the point of the Question.

Mr. Blenkinsop: The question has not yet arisen, but I am prepared to keep in

mind the hon. and gallant Gentleman's views on the matter.

Lieut.-Commander Hutchison: Cannot the Minister give us an assurance that he will—

Mr. Speaker: rose.

Young Soldiers (Service Grants)

Mr. Marlowe: asked the Minister of Pensions under what authority payment of War Service Grant to the wives of Servicemen under 21 years of age is limited to cases of pregnancy, unfitness for employment by reason of ill-health or the case of infirm relatives; and whether, in view of the fact that these wives receive no marriage allowance, he will extend the ambit of such grants to include cases of need or hardship arising from other causes.

Mr. Blenkinsop: From the inception of the War Service Grants Scheme in 1939, assistance to a childless wife has been given in cases where the circumstances are as set out by the hon. Member or in other cases of hardship in which the wife is prevented from taking up employment. The conditions for a grant are the same, irrespective of the age of the husband.

Mr. Marlowe: Does the hon. Gentleman realise that this position cannot possibly be allowed to continue? Is he aware that the Service Departments ride off their responsibility by saying that war service grants can be granted by the Minister of Pensions and that the Minister refuses to grant them unless the wife comes within these particular categories?

Mr. Blenkinsop: I would refer the hon. Gentleman to the Debate which took place on the Adjournment last night, when the Secretary of State for War made a statement.

Oral Answers to Questions — BRITISH ARMY

Requisitioned Hotel, Cramond

Lieut.-Commander Hutchison: asked the Secretary of State for War whether he is aware of the shortage of hotel accommodation in the Edinburgh district; that this shortage will be detrimental to the success of the forthcoming International Festival of Music and Drama; and whether, under these circumstances, he


will derequisition forthwith, Craigiehall Hotel, Cramond, to provide accommodation for visitors to the festival.

The Secretary of State for War (Mr. Bellenger): I am aware of the shortage of hotel accommodation in the Edinburgh district, but I cannot believe that the success of the forthcoming International Festival of Music and Drama will be impaired by the loss of the Craigiehall Hotel, which has only some 16 bedrooms. These premises, I regret, cannot be derequisitioned.

Lieut.-Commander Hutchison: Is the Minister aware that not much use is being made of these premises at the moment, and that there is a disused camp about 1,000 yards away which his Department could use?

Mr. Bellenger: I do not think that it would be suitable for the purpose that we have in mind.

Families of Personnel (Leave Travel)

Brigadier Low: asked the Secretary of State for War if he will announce the arrangements made for officers and other ranks living with their wives and families in Germany, to travel on leave to the United Kingdom accompanied by their families: and whether they can make the return journey accompanied by their wives and families.

Mr. Bellenger: It is a condition of families joining officers or other ranks at stations abroad that the husband ceases to be eligible for conveyance at public expense to the United Kingdom on leave. Service personnel and their families may, of course, return to the United Kingdom for holidays at their own expense. They could not, however, travel together as there are no facilities for families on the ships which carry Service personnel, and vice versa. Ships have had to be specially adapted for the transport of wives and children

Brigadier Low: Bearing in mind the fact that, for a great many purposes, service in Germany counts as home service, does not the right hon. Gentleman think that he ought to make arrangements whereby families can go on leave where they like?

Mr. Bellenger: No, Sir, I think not. In some respects B.A.O.R. is in a much more favourable position than other commands.

Ambush, Saigon (Casualties)

Mr. William Shepherd: asked the Secretary of State for War if he has further news of the British soldiers missing after an ambush on the 10th June near Saigon; and what efforts have been made, and are being made, to get in touch with those who are believed to have been carried off by the bandits.

Mr. Bellenger: My information is that on 10th June, a French convoy of three vehicles was ambushed on the road between Saigon and Cap St. Jaques. One 15 cwt. truck travelling in the opposite direction in which were 11 British Servicemen, and one civilian interpreter, became involved in the ambush. The truck left the road and became bogged. The bandits, believed to be Japanese, heavily engaged the truck with small arms fire. Fire was returned until ammunition was exhausted, after which the bandits attacked the truck. It was during this attack that the following casualties were incurred: Army, four killed, four wounded and one missing; Air Force, one killed and one wounded, and one civilian killed. I am awaiting a further report and will write to the hon. Member.

Mr. Shepherd: Can the Minister say what has been done to try to trace the missing man? Does he not realise that the present position gives rise to much anxiety on the part of the parents?

Mr. Bellenger: Yes, Sir, I appreciate the latter part of the hon. Gentleman's question. I sympathise with the relatives and I am doing all I can to obtain further information.

Mr. Driberg: Have diplomatic representations been made to the newly-established Viet-Namese Republic? If not, will my right hon. Friend consult the Foreign Office, with a view to that being done?

Mr. Bellenger: I could not say, without notice.

Release Deferment (R.E.M.E.)

Mr. C. S. Taylor: asked the Secretary of State for War in which age and service groups the demobilisation of telecommunication mechanics, R.E.M.E., has


been deferred; how many personnel are involved; and how many of these are not at present employed in their correct trade.

Mr. Bellenger: On 31st October a total of 51 other ranks of various trades in R.E.M.E. had their release deferred compulsorily. Their age and service groups ranged from 32 to 45 and I will circulate in the OFFICIAL REPORT the numbers in each group. I regret that I cannot say to what trade in R.E.M.E. each of these men belong but I am satisfied that generally men who are deferred are not misemployed. If, however, the hon. Member has any particular case in mind I will gladly look into the matter.

Following are the numbers:


Age and Service Group



Number


32
…
…
…
1


36
…
…
…
6


37
…
…
…
12


38
…
…
…
6


39
…
…
…
4


40
…
…
…
5


41
…
…
…
5


42
…
…
…
5


43
…
…
…
3


44
…
…
…
3


45
…
…
…
1

Personal Case

Mr. Charles Smith: asked the Secretary of State for War whether he has considered the case of a soldier, 14944324, about whom the hon. Member for Colchester wrote to his Department on 23rd April, 28th May and 5th July, 1946; what this man's academic qualifications are; how long he has been in the Army; what his substantive rank now is; and whether he is aware that this soldier has, on three occasions, been recommended by specialists boards for transfer to the Army Education corps and, on three occasions, had the transfer cancelled by order of his Department.

Mr. Bellenger: The soldier referred to is a Bachelor of Arts. He joined the Army on 1st March, 1945, and his substantive rank is private. I am aware that he has been recommended on three occasions for transfer to the Army Educational Corps by interviewing boards and that such transfer has not been approved by my Department. It is a matter for the Army

Council to decide the corps in which a soldier can best serve. I would refer my hon. Friend to the replies given him on 19th February and 2nd July which state the true position.

Mr. Smith: Since the three boards in question interviewed the man and the Army Council have not interviewed him, will the right hon. Gentleman state on what grounds the Army Council refused this transfer on three occasions?

Mr. Bellenger: As explained in the previous answer to my hon. Friend, the Army Council delegate their duties to suitable officers and that is the reason why the Army Council itself would not have interviewed this soldier.

B.A.O.R. (Leave)

Mr. Hurd: asked the Secretary of State for War when he expects to be able to shorten to four months, as formerly, the period between United Kingdom leave allowed to B.A.O.R. troops.

Mr. Bellenger: There is no intention of introducing a four monthly interval between periods of leave for troops in B.A.O.R. The normal interval has, since privilege leave started on 1st July, 1945, been six months, and although the shipping situation immediately after the end of the war in Europe permitted a rather shorter interval, the paramount importance of releasing shipping for its normal purposes has now made it necessary to revert once more to the six monthly interval. Each period of leave has, however, been increased from 12 to 19 days.

Oral Answers to Questions — PRISONERS OF WAR

Payment in Marks

Mr. Driberg: asked the Secretary of State for War if he will consider paying for part of the work performed by German prisoners of war in the form of credits cashable in marks by the individual prisoners on repatriation.

Mr. Bellenger: There is already in existence for prisoners of war in the United Kingdom a scheme under which in addition to normal working pay, which is available for current spending, they may receive credits for good output: such credits may be used for remittances to their families in Germany; and any


balance not so used and any balance of normal working pay is payable to them in marks in Germany when they are repatriated.

Fraternisation (Christmas)

Mr. Skeffington-Lodge: asked the Secretary of State for War whether, in the event of no earlier relaxation of the non-fraternisation regulations, he will consider making such special arrangements as would allow German prisoners of war to spend Christmas day in British homes, where invited to do so.

Mr. Bellenger: I do not at present contemplate any relaxation of the current rules.

Mr. Stokes: May I ask my right hon. Friend whether he does not think that this would be a golden opportunity to instil a little bit of British home life into these people? Surely this opportunity ought not to be wasted?

Mr. Skeffington-Lodge: Will the right hon. Gentleman bear in mind that it is important to return our prisoners of war to Germany as an example of our British way and purpose, and that the suggestion in my Question will do very much to achieve that end?

Hon. Members: Answer.

Mr. Bellenger: I agree with my hon. Friend in the first part of his question and we are certainly doing a lot towards that end, but I am afraid that I cannot add anything to the answer I have given.

Oral Answers to Questions — MALAYA (DUTCH TROOPS)

Mr. Piratin: asked the Secretary of State for War how many soldiers of the Netherlands East Indies armies have been and are being trained in the Malayan Union and Singapore; how many troops of these armies are still stationed there; and when they are finally to be evacuated.

Mr. Bellenger: I have called for a report and will write to the hon. Member.

Oral Answers to Questions — PUBLIC MEMORIALS (DESIGN)

Mr. Driberg: asked the Prime Minister if he is aware of the disappointment caused by the academic character of

the designs for the Roosevelt memorial statue and the emblematic sculptures for Waterloo Bridge; by whom and on whose advice these designs were approved; and if, for future similar cases, he will establish the principle of open competition, so that younger and more experimental artists may have the chance of contributing to the adornment of our cities.

The Prime Minister (Mr. Attlee): The Roosevelt memorial statue and the sculptures of Waterloo Bridge were commissioned by the Pilgrim Society and the London County Council respectively; in the former case the design has received the general approval of the Royal Fine Art Commission. When statues are erected at His Majesty's Government's expense it is the practice of my right hon. Friend the Minister of Works to consult the Royal Society of British Sculptors and other relevant professional bodies with regard to the choice of artists, and competition as a means of selection is not excluded.

Mr. Driberg: Has my right hon. Friend noted the very considerable volume of opinion—expressed in "The Times," the "News Chronicle" and other newspapers by people who gladly contributed to the fund—that this Roosevelt statue will be quite unworthy of a very great man and of this great city, and can he say whether it is not even now possible to reconsider the matter?

The Prime Minister: I am well aware that on many of these art questions opinions are divided.

Mr. Wilson Harris: Will the Prime Minister say a word on one point which is causing some concern? Does he not agree that for obvious reasons a sedentary posture is much more characteristic of the late President Roosevelt than a standing posture? Will he not make representations in favour of the former, on the model of the very impressive seated statue of President Lincoln at Washington?

The Prime Minister: This is a point on which we all have our views; I have mine. But those who have considered it after taking various views have decided the other way.

Mr. Keeling: Can the Prime Minister say whether any detailed suggestions were made by the Royal Fine Art Commission about the Roosevelt statue and whether


they are being adopted, and secondly, as regards the Waterloo Bridge sculptures, whether the Royal Fine Art Commission are being consulted, or, if not, whether he will arrange that they should be consulted?

The Prime Minister: As to the first part of the question, I cannot say what detailed recommendations were made, but the Royal Fine Art Commission were consulted. On the second part of the question, I understand that the London County Council have not consulted them yet and have not really approved a design. I understand that they will submit the eventual design to the Royal Fine Art Commission.

Oral Answers to Questions — EMERGENCY POWERS (DURATION)

Lieut.-Colonel Corbett: asked the Prime Minister when he expects the existing state of emergency to be brought to an end.

The Prime Minister: I would refer the hon. and gallant Member to the reply given by my right hon. Friend the Lord President of the Council to the right hon. Member for Saffron Walden (Mr. R. A. Butler) on 18th December, 1945.

Oral Answers to Questions — NATIONAL FINANCE

Pennies and Shilling

Mr. Peter Freeman: asked the Chancellor of the Exchequer whether he is aware of the shortage of penny and shilling coins due to the accumulation in slot-machines; and what steps are being taken to secure their earlier release, or to augment the supply.

The Chancellor of the Exchequer (Mr. Dalton): There is some shortage of penny coins but not of shillings. Additional pence are being coined by the Mint at the rate of over 60,000,000 a year.

Share Release, Canada (Charge)

Mr. Assheton: asked the Chancellor of the Exchequer if he is aware that the Canadian Government make a capital charge of two per cent. before releasing shares in Canadian companies belonging to British firms but which

happen to be registered in German names; and whether His Majesty's Government make the same charge under similar circumstances.

Mr. Dalton: Yes, Sir. Canada makes this charge and we do not.

Mr. Assheton: Would my right hon. Friend think it possible to make further representations to the Canadian Government on this matter?

Mr. Dalton: I do not know that it is quantitatively a very big matter, but we will take it up with them and see if we can get uniformity.

Public Works Loans Board (Interest)

Mr. Boothby: asked the Chancellor of the Exchequer why the loans advanced to local authorities by the Public Works Loans Board bear a rate of interest so far out of line with that achieved in respect of Government securities; and what steps he is taking to reduce this rate.

Mr. Dalton: New loans by the Board are at 2½ per cent. or less. As regards old loans at higher rates of interest, I would refer the hon. Member to the reply given last Tuesday to the hon. Members for West Fife (Mr. Gallacher), Central Edinburgh (Mr. Gilzean) and North Edinburgh (Mr. Willis).

Mr. Boothby: Does not the Chancellor of the Exchequer think it is altogether out of order—I would almost say—for local authorities to be required to pay interest rates up to 5 and 6 per cent., and even 7 per cent. in some cases, for retrospective loans? Will he not do something about it?

Mr. Dalton: Those local authorities had the misfortune to borrow under a Tory Government, but none the less, if my hon. Friend will study the answer to which I have referred him he will see that all the gates of hope are not quite closed.

Mr. Gallacher: Would the Chancellor of the Exchequer consider hitting the Tories and those they represent a real crack by doing away with interest altogether?

Mr. Stokes: May I ask the Chancellor whether he contemplates introducing


legislation to relieve some of the local authorities from these exorbitant rates which were perpetrated on them when the party opposite was in office?

Greyhound Racing Concerns (New Issues)

Mr. Blackburn: asked the Chancellor of the Exchequer (1) whether the consent of the Treasury was given to the recent offer for sale of 2,000,000 shares of London Stadium. Limited, a company widely engaged in the provision of greyhound racing tracks;
(2) what instructions he has given to the Capital Issues Committee to refuse consent to capital issues which are for purposes not deemed socially desirable.

Mr. Dalton: This case was not one which involved the raising of new money, but only a sale of existing shares. The Capital Issues Committee are guided, as regards priorities for new issues, by a Memorandum issued in May 1945 (Cmd. 6645) and by indications given by me from time to time. In May of this year I instructed them that consent should not be given to any new issues for greyhound racing concerns.

Mr. Blackburn: While I appreciate my right hon. Friend's answer, may I suggest to him that he indicated quite clearly on the Second Reading of the Borrowing (Control and Guarantees) Bill that in the case of new issues of capital access to the capital market would be limited to purposes deemed socially desirable? Is that still the policy of the Government?

Mr. Dalton: I have indicated one example in which we have carried that out by a specific instruction to the Capital Issues Committee.

Lieut.-Commander Gurney Braithwaite: May I ask whether the National Investment Council was consulted in this case? Are we to understand that the Government, having failed to supply the people with bread, are now concentrating on circuses?

Mr. Skeffington-Lodge: Does not the Chancellor realise that dog racing is a racket—

Mr. Speaker: Sir Thomas Moore.

Mr. Skeffington-Lodge: rose—

Hon. Members: Order, order.

Mr. Speaker: I am doing my best to try to get on with Questions. I have called the next Question.

Mr. Skeffington-Lodge;: Dog racing is a racket.

Income Tax (Incidence)

Lieut.-Colonel Sir Thomas Moore: asked the Chancellor of the Exchequer whether it is now his intention to change the incidence of income taxation from a direct to an indirect method.

Mr. Dalton: The hon. and gallant Member will not expect me to anticipate my Budget Statement.

Sir T. Moore: As the right hon. Gentleman gave an indication of Tory intentions in a recent public speech, could he not take this House into his confidence?

Mr. Dalton: I gave a general statement of intention in my last Budget Statement, and the lecture to the Fabian Society—to which I suspect the hon. and gallant Gentleman is referring—added nothing new of substance to what I said in my Budget speech.

Overseas Investments (Realisation)

Sir W. Smithers: asked the Chan cellor of the Exchequer what was the amount of our overseas investments that was sold for the purpose of the conduct of the war; and what is the amount at the latest available date.

Mr. Dalton: £1,118 million were realised for this purpose. No estimate of the value of the remaining investments can be made at present.

Sir W. Smithers: In view of the apparently very heavy reduction in overseas investments, and in view of the fact that the sellers market is coming to an end, and the American loan is coming to an end, would the right hon. Gentleman tell the people that we must export at world competitive prices, or starve?

Mr. Speaker: The Question which was asked dealt with the amount of our overseas investment.

P.A.Y.E. (Collection Expenses)

Sir W. Smithers: asked the Chancellor of the Exchequer if, in view of the heavy clerical work involved, he will allow deductions for expenses in the collection and payment of Pay as you earn.

Mr. Dalton: The law is already what the hon. Member suggests that it should be.

Sir W. Smithers: Why is it then that many firms have' to employ extra secretarial staff to do the work for the Treasury, because if they do not make proper returns they are liable to very heavy penalties?

Sir W. Darling: Is the Chancellor aware that there are frequent instances of persons who are not making a profit in their businesses having to add to the loss they are already making by employing clerical staff to collect Pay as you earn?

Hon. Members: Answer.

Mr. Dalton: I am anxious to answer any questions which would expand the field covered by the original Question on the Paper. I doubt whether an answer to that question would do so.

Mr. Mikardo: Is my right hon. Friend aware that if proper systems of office machinery are used, the amount of clerical labour involved is by no means heavy?

Hon. Members: Oh.

Treasury Notes

Mr. Keenan: asked the Chancellor of the Exchequer if he will consider the issuing of new Treasury notes for £I and 10s. and the cancellation of the Treasury notes now in circulation, thus checking the holding of large numbers of Treasury notes used for illegal purposes for cash transactions in the black market and evading paying revenue to the State.

Mr. Dalton: No, Sir.

Mr. Keenan: Is the right hon. Gentleman aware that in refusing to take action in this matter he is permitting the black marketeers to carry on sales and to collect large sums in Treasury notes whereas, if they were compelled to exchange accumulations of them, he would be doing the nation a service similar to what is done in other parts of the world?

Mr. Dalton: I think the remedy is quite disproportionate to the disease.

Military Awards (Income Tax)

Major Legge-Bourke: asked the Chancellor of the Exchequer at what rate Income Tax is deducted from monetary awards made with military decorations; and why there is any such deduction.

Mr. Dalton: Pensions awarded with military decorations are liable to tax like other pensions, as earned income. The amount of tax, if any, depends on the pensioner's total income and on the tax reliefs and allowances due to him.

Major Legge-Bourke: Will the right hon. Gentleman consider whether in his next Budget he can eliminate this taxation?

Mr. Dalton: I must never anticipate these things too long beforehand. At first sight, however, I do not think there is a strong case for making a special discrimination in favour of this particular group of pensioners.

American Loan (Dollar Proceeds)

Sir W. Smithers: asked the Chancellor of the Exchequer if he will give a detailed account of the purposes for which the $600,000,000 of the U.S. loan, already drawn, have been used; how much remains to be drawn; and what is the sterling equivalent of the balance.

Mr. Gammans: asked the Chancellor of the Exchequer how much of the U.S. loan spent, or hypothecated, to date is in respect of capital goods or consumer goods, respectively; what is the value of goods and services under these two headings which have been ordered but not yet paid for; and when the loan is likely to be exhausted at the rate of expenditure incurred during the past six months.

Mr. Dalton: As I explained to the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) on 1st August, it is impossible to separate the proceeds of dollars from the United States credit from those of dollars otherwise obtained. The undrawn balance of the credit is 3,150 million dollars or £781 millions. No useful estimate of the duration of the credit can be based on the figures of the past six months.

Sir W. Smithers: Is not this typical of the usual evasiveness of the Chancellor, and does he not realise—

Mr. Speaker: I have said before that insinuations and implications are out of Order.

Sir W. Smithers: The Chancellor, in my opinion, has not answered my Question, but has tried to run away from it. I want to ask him if he does not realise that the day of reckoning is coming?


When the American loan is finished, he, with his awful policy, cannot repay the American loan, and that will place British credit in jeopardy. It is our greatest asset.

Mr. Gammans: Is the Chancellor aware that when he recommended this House to accept the American loan, he stated quite categorically that the greater part of it would be used for capital equipment? Is he further aware that the President of the Board of Trade has told the House that more than 90 per cent. of it has in fact been spent on consumer goods?

Mr. Dalton: My comment is that the hon. Gentleman's summary of the speech of my right hon. Friend is not wholly accurate.

Sir W. Smithers: May I ask you a question, Sir? It is whether you are aware that those of us who have not had the advantage of being educated at Eton have a saying, "Eton produces the very best, and the very worst"?

Mr. Speaker: Perhaps I might say in answer to the hon. Member that that shows that Eton then produces quite a true form of democracy.

Sir W. Smithers: With great respect, may I ask how long you are going to allow the Chancellor of the Exchequer to keep on being evasive?

Mr. Speaker: I think we had better get on with the Business.

Oral Answers to Questions — HOUSE OF COMMONS MEMBERS' FUND

Sir John Mellor: asked the Chancellor of the Exchequer whether steps will be taken to repeal the House of Commons Members' Fund Act, 1939, when honourable Members become liable to contributions under the National Insurance Act, 1946.

Mr. Dalton: I have no reason to think that this course would be approved by the House generally, but I understand that the question is being explored through the usual channels.

Sir J. Mellor: Would the Chancellor agree that, at the time the Act was passed, it was not contemplated that there would be two compulsory schemes for hon. Members?

Mr. Dalton: I think that very few hon. Members grudge a contribution of £1 a month out of a salary of £1,000 a year.

Oral Answers to Questions — GOVERNMENT DEPARTMENT STAFFS, LLANDUDNO

Mr. Dumpleton: asked the Chancellor of the Exchequer if he will now give an indication when the Departments at Llandudno will be able to return to London, so that the civil servants concerned can return to their homes.

Captain John Crowder: asked the Chancellor of the Exchequer what progress has been made with the arrangements to move the staff of the Surtax branch of the Inland Revenue back to the London area from Llandudno.

Brigadier Head: asked the Chancellor of the Exchequer whether he is aware that when Civil Service Departments were evacuated from London to Llandudno and elsewhere a Government pledge was given that when hostilities ceased they would be returned to London; that this promise was officially renewed on 21st June, 1946; that these civil servants have been away for more than seven years; and if he will now give an assurance that they will be transferred home at an early date.

Mr. Gammans: asked the Chancellor of the Exchequer how many civil servants who were sent to Llandudno from London at the beginning of the war are still there; and if, in view of the fact that many of them have been separated from their families for over seven years, he will now arrange for them to be brought back to London.

Mr. Dalton: I have great sympathy for the personal hardships to which these Questions refer. The evacuated staff still at Llandudno number about 1,700. No pledge was given that the staff would return to London as soon as hostilities ceased, but I am anxious to move them from Llandudno. Some have already returned to London and, as I announced last month, the Estate Duty Office is moving to Harrow as soon as possible, and the Departmental Claims Branch to Cardiff. This last move has already begun.

Mr. Gammans: As more and more people are compelled to be Government servants, does not the Chancellor feel that the Government ought to set an example and treat their employees more considerately?

Mr. Dalton: Entry into the Government service, so far as I know, is still voluntary. I have already explained that we are anxious to make provision as soon as possible for liberating the quarters occupied by the staff at Llandudno and moving them somewhere more convenient, but there is very great congestion in London at present, both for Government staffs and for other purposes.

Captain Crowder: Will the Chancellor bear in mind that many of these employees could go back to their own homes, and therefore would not want extra accommodation? Can he say what is the position with regard to the Surtax branch?

Mr. Dalton: It is a question of the place of work, as I am sure the hon. and gallant Gentleman appreciates, and of finding suitable office accommodation. We are endeavouring to do that. I have the whole matter much in mind and am seeking to deal with it as expeditiously as possible.

Oral Answers to Questions — TRANSPORT NATIONALISATION (L.P.T.B. GUARANTEED STOCK)

Mr. Nigel Birch: asked the Chancellor of the Exchequer why L.P.T.B. 3 per cent. Guaranteed Stock (1967–72) has been included in the schedule of transport stocks to be taken over under the transport nationalisation scheme, in view of the fact that this stock is guaranteed by His Majesty's Government and under the terms of issue is not redeemable until 1967.

Sir J. Mellor: asked the Chancellor of the Exchequer whether he will give an assurance that the Government will respect and implement the guarantee by the Treasury of the principal of, and the interest on, the L.P;T.B.'s three per cent. Guaranteed Stock, 1967–72.

Captain Crowder: asked the Chancellor of the Exchequer if he will make a

statement on the taking over of railway stock, as regards the L.P.T.B. 3 per cent. Guaranteed Stock (1967–1972) which carries specific contractual obligations.

Mr. Dalton: The guarantee is against default on the stock by the Board. No question of implementing the guarantee arises; if Parliament provides for the compulsory acquisition of the stock and the issue of compensation to the present owners.

Mr. Birch: Is the right hon. Gentleman aware that up till now Government guaranteed stocks have been dealt in on the basis that their security was exactly the same as direct Government obligations, and are we to take it that this is a precedent for similar behaviour on other Government stocks and other Government guaranteed stocks?

Mr. Dalton: I am anxious to make this as clear as I can. As I understand it, and as I am advised by my legal advisers, the point is that this is a guarantee that this stock will not be defaulted on by the Board. In the event of the Board being unable to pay the necessary revenue the Government would stand behind the Board. That does not touch the general question, which I regard as unchallengeable, of the right of the Government at any time to acquire by Act of Parliament any form of private property anywhere on payment of compensation. It could be debated whether the terms of the compensation were reasonable or not, but the right of the Government to acquire, in my view, is quite unchallengeable.

Mr. Oliver Stanley: Does not this particular stock, from the point of view of compensation, stand on quite a different footing from the other railway stocks that have been taken over, because here, owing to the guarantee, there was no element of risk which there must always be in any private stock? Therefore, should not this be treated exceptionally from the point of view of compensation?

Mr. Dalton: I should judge that the Stock Exchange quotation would reflect the fact to which the right hon. Gentleman has referred. The stock was, in fact, quoted at the date chosen for the assessment of compensation at 107 7 8ths, and that price reflects the fact that there was a guarantee behind the stock.

Sir J. Mellon: In view of the Chancellor's reply, does not the Treasury guarantee of this stock appear to be just another meaningless symbol?

Mr. Dalton: No, Sir.

Major Cecil Poole: But is it not a fact that all the main line railway companies have guaranteed stocks?

Mr. Dalton: Not quite—do not let us be confused—in the same legal and explicit sense as this stock. As a matter of fact, a lot of the stocks of the railways have failed to pay a dividend from time to time.

Captain Crowder: Will the Chancellor of the Exchequer bear in mind that, as this stock is guaranteed as to both principal and interest, naturally the trustees would think that they would be able to draw 3 per cent. until at least 1967 for their beneficiaries, and is it not putting the trustees who took up this stock in a very awkward position? Will the right hon. Gentleman consider it again?

Mr. Dalton: All these matters will, of course, be open to debate when the Transport Bill is introduced, but I have given an answer on the legal question to which I think the hon. Gentleman who put down the Question was directing his mind.

Captain Crookshank: Does that mean that these figures will be inserted in the Bill and will therefore be discussable?

Mr. Dalton: I cannot commit myself on the text of the Bill.

DEMOBILISATION (RATE OF RELEASE)

The Prime Minister (Mr. Attlee): I desire to make a statement in regard to releases from the Forces. On 6th November, the Minister of Labour and National Service announced a provisional programme of releases from the Forces for the first six months of 1947. This announcement has created disappointment, particularly in the Army. Everyone will sympathize with those who have to stay on in the Forces for a longer period than they thought probable at one time, and all will share their disappointment. I wish therefore to place before the House, and them, quite frankly, the reasons which have made it imperative for His Majesty's Government to take these decisions.
From the outset His Majesty's Government have made it clear, first, that they intend to fulfil the tasks which have been laid upon them following the war; and second, that the rate of release could not be definitely determined in advance, but must depend on the speed and success with which these tasks were completed. This was made quite clear in the Defence White Paper of February, 1946. In paragraph 12 it was stated that the programme aimed at a strength on 31st December, 1946, of 1,100,000 men, with an additional 100,000 men under training, a total of 1,200,000. The White Paper then stated:
It must be reiterated that the achievement of these target figures depends upon the development of events, and upon the successful settlement of many problems left over from the war.
Here let me emphasise that for many reasons His Majesty's Government would wish to complete the tasks laid upon them as soon as possible. But, the speedy and successful solution of these problems does not lie entirely within the power of His Majesty's Government. On 21st November, I informed my hon. Friend, the Member for Maldon (Mr. Driberg), that events prevented us from achieving the target of 1,200,000, and that the total strength at the end of the year is likely to be 1,385,000. The same reasons which have made it impossible to achieve the target strength at the end of 1946, prevent His Majesty's Government from providing for releases in the first half of 1947 at a higher rate than that announced on 6th November.
The reason for the higher number of men retained in the Forces, and the slower rate of release, is quite simply that progress in the work of concluding peace treaties and establishing normal conditions in the world has been much slower and more difficult than we had a right to expect when our plans were drawn up at the beginning of the year. We are now able to withdraw our Forces from Indonesia, but we are not at present in a position to do so from any part of Europe. Furthermore, the unsettled state of affairs in Palestine puts a continuing strain on our Forces. In Austria, we have been unable even to begin consideration of the Peace Treaty, although we have been pressing for months past for an early start on this work. In Venezia Giulia, the frontier between Italy and Yugoslavia is


not yet settled, and we are pledged to keep our troops in Venezia Giulia until agreement in this matter has been reached in the peace treaty and the relevant portions of the treaty implemented. As regards Greece, the House is aware that our forces have remained there at the request of every successive Greek Government to help in the restoration of order and tranquillity.
In accordance with the White Paper on call up to the Forces in 1947 and 1948 (Cmd. 6831) we are calling up as many young men as possible in order that they may, in due course, take the place of men who have seen a long period of service. In particular, a stricter standard is being applied in granting deferment from call up than was current during the war. By the end of 1946 all men under 30 will have been called up, or be in process of being called up, except those who cannot be spared if essential production such as coalmining, agriculture and building is to be maintained. But, the new recruit cannot step into the place of the trained man at once, and our Forces must retain an adequate proportion of trained men to discharge the tasks which fall to them, and to man effectively the many highly technical branches in all three Services, and to train new recruits.
It has been suggested that the disparity in the age-and-service groups being released from the three Services is a departure from the release scheme, and a breach of faith. This is not so. It was recognised when the scheme was prepared, and so stated at the time, that releases would have to proceed at different rates in the three Services to take account of their different structures and roles. It would, for example, be no remedy to transfer men from the Navy to the Army, or Air Force. By the time those to be transferred were identified, replaced where necessary, brought back to this country, re-trained and sent abroad again, most of them would be due for release. In any case, such transfers could not materially affect the rate of release in the other Services unless they were carried out on a scale so large as to disorganise the Navy and render it incapable of meeting its own commitments.
In the light of all these considerations, His Majesty's Government have come to the conclusion that the rate of release for

the first half of 1947 is the maximum which can be accepted. We believe that we can keep to this programme, which is calculated to achieve the aim of releasing in 1947 all men called up before 1st January, 1944. By the end of this year we shall have released about 4,300,000 men and women out of the 5,100,000 who were serving in the Forces on V.E. Day. In handling this immense problem His Majesty's Government have never yet gone back on any of the programmes of releases which have been promulgated to the men and women in the Armed Forces.

Mr. Eden: While I do not want to contest the list of present commitments which the Prime Minister has just read out—and to which, I fear, we must now add the deteriorating situation in India— there are two questions I would like to put to him. First, as he will be aware, one of the most important sources of discontent is the feeling among the men who have served for long periods dating from the war, that they are being asked to continue that service, while those who are replacing them will have to serve for much shorter periods. Can the Prime Minister give any undertaking that an attempt will be made to even out that contrast? The second question I would like to ask him is in relation to reserved occupations, with which he has dealt. There were many reserved occupations which had to be created for the purpose of winning the war. It is not easy to persuade serving soldiers who have served a long time. that these reserved occupations must remain exactly as they then were. Can anything be done to ensure that those in reserved occupations are reduced to the absolute minimum for national needs, and that those who need not be retained for that purpose can go and do their service, as others did in the war?

The Prime Minister: In answer to the first part of the question, we naturally do not want to call up people for longer periods than are necessary. It is inevitable that people who are called up now will not be serving for periods as long as some of those who had to be kept serving during the war. With regard to the second point, I will look into it to see if anything can be done in regard to reserved occupations. We are trying to get relief for the people who have served


for a long time by calling up everybody except those who are absolutely essential at the present time. If the right hon. Gentleman has any specific points, I will look into them.

Mr. H. D. Hughes: Can the Prime Minister give an assurance that the statement in the White Paper on call-up, that men serving in the Forces on 31st December, 1946, will be released before the end of 1948, still stands?

The Prime Minister: That is our aim.

Viscount Hinchingbrooke: Is the Prime Minister aware of the colossal blunder which the Government have committed in having demobilised the Services of this
country down below the safety limit and then having to adjust them afterwards, with consequent hardship to our serving men overseas and their parents?

The Prime Minister: No. There was no blunder. Perhaps the noble Lord will remember the line taken by hon. Members opposite on this subject.

Mr. Shurmer: Is the Prime Minister aware—I say this respectfully—that it is not sympathy that wives and parents want, it is their husbands and sons? Is he aware that owing to this hold-up in demobilisation, many men serving in the Middle East, who would have been eligible for leave, will now spend their fourth or fifth Christmas away from home, as a result of this slow-up in demobilisation? It is not good enough.

The Prime Minister: I will certainly look into the question of leave, but I think I have fully explained the reasons, and the fact that we gave a target, but we said that it must necessarily depend on circumstances.

Brigadier Head: Is the Prime Minister aware that had this statement been made two or three weeks earlier, a great deal of discontent, misunderstanding and correspondence might have been avoided?

Mr. Henry Usborne: Does the Prime Minister realise that whereas most people realise that there are international commitments which require the presence of troops, they also feel that those troops ought, if possible, to come from a United Nations police force? Will the Prime

Minister say whether the Government are considering the creation of such a force?

Mr. Speaker: That seems to be opening up a rather wider vista.

Sir Frank Sanderson: In view of the large number of letters which hon. Members are receiving from overseas on this subject, would the Prime Minister consider issuing a statement in the form of a White Paper, available at the Vote Office, so that we could include it in our mail?

The Prime Minister: The statement will be printed. I am also proposing to broadcast a statement over the wireless tonight so that it can then be sent over to the troops and broadcast to them.

Mr. Paget: A large number of young men have had their university careers interrupted by service, and men up to Group 55 were released under Class B in the current year. Could the Prime Minister give us any indication of what groups will be able to resume their university education at the beginning of the 1947 year, because it is important that these young men should be able to make their arrangements?

The Prime Minister: I cannot answer that question without notice. Perhaps my hon. Friend will put it on the Order Paper.

Mr. Walter Fletcher: Is the Prime Minister aware of the very bad effect on newly-joined troops of finding the mental attitude of men who are discontented because they think they have been let down, and have had to serve too long? Will the Prime Minister take steps to put all the facts of the case before recruits when they join up?

The Prime Minister: I think everyone should take care not to encourage troops to think that they have been let down, when they have not been.

Mr. Stokes: Will the Prime Minister bear in mind that we cannot call up young skilled and semi-skilled men and at the same time have a high output? Will he give instructions to the Departments concerned. to bear that point very much in mind?

The Prime Minister: They are very well aware of that. There has to be a balance in these things. On the one hand, hon. Members, quite rightly, say that it is a


hardship for the people to be kept overseas. On the other hand, I have had claims from industry, from universities and others that we must not spoil young men's careers. We must try to have even justice.

Mr. Pickthorn: Without in the least wishing to suggest that a university career should be an excuse for a soft option, might I ask the right hon. Gentleman a supplementary to his earlier answer to the hon. Member for Northampton (Mr. Paget) to hold up the hands and support the efforts of other Ministers, especially the right hon. Gentleman on his right, in remembering the importance of the actual time of year of release for university students?

The Prime Minister: Yes, I quite agree with the hon. Member. I am in contact with my right hon. Friend. That is certainly a thing which should be done.

Mr. Gallacher: I want to ask the Prime Minister if he is not aware that the statement he has made today will not ease the bitter feeling which many of these soldiers have; and will he make certain that what happened at an R.A.O.C. camp in the Middle East, where infantry with Bren guns and armoured cars were sent to patrol the camp will not be repeated— that such a shameful action as British soldiers being used against British soldiers will not occur again?

Mr. C. S. Taylor: Will the Prime Minister—

Mr. Gallacher: May I have an answer?

Mr. Speaker: The hon. Member put an argument, not a question.

Mr. Gallacher: I asked if it is not the case that infantry was used against other British soldiers. I want an answer to that.

Mr. C. S. Taylor: Would the Prime Minister consider issuing instructions that a summary of this statement might be reprinted in formation or even unit orders overseas, so that the troops may have the benefit of it?

The Prime Minister: We are taking the greatest care to see that this is brought to the notice of the troops.

Several Hon. Members: rose—

Mr. Speaker: I think it is time we got on to the next Business.

BILL PRESENTED

NATIONAL HEALTH SERVICE (SCOTLAND) BILL

"to provide for the establishment of a comprehensive health service for Scotland, and for purposes connected therewith," presented by Mr. Westwood; supported by Mr. Arthur Greenwood, the Lord Advocate, Mr. Buchanan and Mr. Thomas Fraser; to be read a Second time upon Monday next, and to be printed. [Bill 11.]

Orders of the Day — EXCHANGE CONTROL BILL

Order for Second Reading read.

3.49 p.m.

The Chancellor of the Exchequer (Mr. Dalton): I beg to move,"That the Bill be now read a Second time."
This is a relatively long Bill, and, if I had heeded some of the advice which I received from some quarters, it would have been even longer. It is, however, I hope, substantially speaking, an agreed Measure. When the Bill was first published it was received with sober and sympathetic support in most organs of the Press. I ask leave to quote briefly one or two of the comments which were made upon the Bill immediately upon its publication. "The Times" said:
The new Exchange Control Bill was received with sober approval in the City yesterday. The few changes in the present system which it foreshadows were thought to be for the better.
The "Financial Times"—I do not see the right hon. Gentleman the Member for Bournemouth (Mr. Bracken) here—said:
Basically it is a constructive measure, given the times we live in.
The "News Chronicle" said:
I could find no out-and-out opponents of it."—
and I am sure Mr. Oscar Hobson worked hard to find them. The "Observer" said:
It is a complicated measure but has been fairly described as a conservative and consolidating measure.
The "Stock Exchange Gazette," to which we ought to pay great regard in this context, said:


The necessity for the maintenance of exchange control in present circumstances will not be seriously challenged.
[An HON. MEMBER: "What did the 'Daily Worker' say?"] They were warmly in favour, of course. The"Scotsman"—this brings us wisdom from beyond the Border—said:
The continuance of exchange control for a good many years ahead is not likely to be challenged, for the need is unquestionable.

Mr. E. P. Smith: Why need we have the Press inquiry?

Mr. Dalton: Well, my Press inquiry satisfies me in this context. Why do we need this Bill which is so widely approved by sober organs of opinion, not all unconditionally on the side of His Majesty's present Government? It is an indispensable weapon for safeguarding our balance of payments. If this balance of payments is to be securely re-established, as it must be, and as we aim to re-establish it, we must, as a necessary condition of that safeguarding and securing that re-establishment, husband our exchange resources for a long time. Indeed—and here I touch on the terms of the Amendment on the Order Paper—having studied the matter objectively, I cannot foresee any date which could be named in the future, when it will be possible to restore anything approaching the uncontrolled export of capital which was permitted in prewar days. I cannot see any date when that could be done. That is why this Bill is permanent, and not temporary, in its character.
I am glad to be able to tell the House that the total overseas deficit, of which I spoke in my last Budget Statement, is likely—and this is one of the factors we have to watch with great care in this connection—in terms of sterling, to be substantially less, when this financial year has run its course, than seemed likely at an earlier stage. That reflects great credit upon all those responsible for the export drive. The export drive has succeeded beyond expectations and beyond estimate, and for this reason I am able to say that the total overseas deficit is likely to be substantially less by the end of this year than I thought it would be. So far so good. But within the total overseas deficit, there is a hard currency overseas deficit, hard currency being for this purpose defined as dollars, whether American or Canadian, Argen-

tine pesos, and Swedish crowns. These are the main hard currencies of the world today. The hard currency overseas deficit needs constant watching and, indeed, if I may be allowed this play on words, it is the hard currency overseas deficit which is the hard core of the foreign exchange problem. I do not propose to enter into a lengthy discussion on this, because I have not sufficient time, but I wish to indicate that this is an important factor to keep at the back of our minds in discussing this Bill. There are many forces which are combining at the present time to emphasise the importance of this problem of the hard currency overseas deficit in the years to come.
This is one reason why I do not think any rational person who studies the subject could argue that we could decontrol capital exports until we can see our way more clearly than we do now. Indeed, if we were to decontrol external capital movements, the result would be that the consequent uncontrolled movements of capital would very soon make complete hay of our balance of payments. I say that quite deliberately. We cannot afford now, or in the foreseeable future, any large-scale overseas lending. It simply will not be on the map, arithmetically speaking. Any return to the prewar freedom of capital exports, or anything like it, would run us out of foreign exchange in a very short time. We might be run right out of our foreign exchange resources within a week if we permitted a restoration of the prewar freedom of capital movement. This is one of the many cases in which the individual interest may, very often, come into clear conflict with the most vital of national interests. If we look back to prewar days, days of freedom and misery—[Laughter]—freedom in the context in which I am speaking We are discussing exchange control—

Mr. Pickthorn: Not misery in that context.

Mr. Dalton: In the prewar days there Was freedom for any man to export his capital wheresoever he liked, and there was misery in this island. Those two facts were not unconnected. One of the most potent causes of monetary disorder in the interwar years was the movement of what was called "hot money"— short term speculative funds which were


moved about from one financial centre to another. They were a curse, a financial curse, and I think that is generally recognised now by all who have given thought to the subject.

Mr. Spearman: I think the right hon. Gentleman will agree that there was very little "hot money" leaving this country in the prewar years.

Mr. Dalton: I will say a word in a moment on that. Indeed, I will quote Mr. Montagu Norman, as he then was, who was at that time Governor of the Bank of England. Under an earlier and less enlightened administration of the Bank of England than we have now, a number of leading London acceptance houses—this is relevant because it illustrates what we have now permanently to prevent—acting without consultation with one another, without control by the Bank of England, seriously overlent to Germany, and thus endangered both their own solvency, and the solvency of a large number of persons and institutions who were financially dependent upon them. The result was disastrous, as we all remember. Blame may be attached here or there in terms of political debate but everybody must confess that the result was quite disastrous, and Mr. Montagu Norman, speaking at a bankers' dinner in the City of London on 20th October, 1932, when, of course, he was Governor of the Bank, admitted that
Foreign concerns have been able to borrow on short credit sums which, had the various lenders been aware of it, would have been quite out of the question and have come as a surprise to all of us.
In the same speech, Mr. Norman went on to say:
In the past we were great lenders. Lending here, in the City, was practically indiscriminate. It was merely competitive,
Then he asked the question:
Can we continue with the same freedom in the future?
My answer is "Certainly not," and it is one of the purposes of this Bill to make quite sure that we do not slip back into the state of affairs which seemed to be highly undesirable to Mr. Montagu Norman himself at that time. I quote one more authority. The Macmillan Committee, which reported in June, 1931, had

already given a timely warning—and I quote their words—
of the risk of financing long-term investments by means of attracting short-term foreign funds of a precarious character.
I think that is the answer to the hon. Gentleman. In the view of the Macmillan Committee, there were, at that time, large short-term foreign funds of a precarious character, lodged in London, some of them borrowed from France. There was a tendency at that time to borrow short from France and other foreign countries in order to lend to Germany. The practice was to borrow short from France at a low rate of interest and lend to Germany at a slightly higher rate. [Interruption.]No, the Macmillan Report speaks of borrowing short and lending long. There were two sorts of transaction—borrowing short and lending short, and borrowing short and lending long, and the Macmillan Committee was condemning the latter.
We do not propose to allow that to happen again; this Government will use their majority to prevent that happening, and that is what this Bill is about. We have now accepted a number of obligations under the American Loan Agreement and under the Bretton Woods Agreements, and, whatever else may be said about them—and they have been debated and will be debated again—these Agreements, and the system which is contemplated by them, are the complete antithesis of the anarchy and chaos of the inter-war years in regard to capital movements. We in this country are planning with our friends in the United States and Canada, and with many other countries who are concerned in the Bretton Woods arrangements, under the two new international institutions—the International Monetary Fund and the International Bank—to provide effective machinery for the maintenance of world trade, for regulating foreign exchange rates, for restoring the economy of war-shattered countries through the International Bank, and also for the development of latent natural resources.
During my recent visits to Washington and Ottawa, I found all whom I met there determined, so far as in them lay, to make these two new institutions succeed and achieve these purposes. This Bill—and I must emphasise this— is wholly consistent with the purposes of these two new institutions, and I will


briefly quote from the White Paper, which hon. Members will have read, in which, on pages 2 and 3, this point is made, with the aid of a number of quotations. With regard to the International Monetary Fund, Article I provides that the purposes of the Fund are:
… to promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation … to assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade …
The emphasis is on current trading transactions. This is emphasised when we turn to Article VI, Section 3, of the Bretton Woods Agreement, which says—and I am still quoting from the White Paper:
Members may exercise such controls as are necessary to regulate international capital movements.…
The distinction is between current and capital transactions. In Article VI, Section 1, it is provided that:
a member may not make net use of the Fund's resources to meet a large or sustained outflow of capital, and the Fund may request a member to exercise controls to prevent such use of the resources of the Fund.
Having quoted these illustrative passages from the document governing the Fund, the short point is that we in this country are committed by our agreements to make sterling convertible at a certain date for current transactions, and, if we are to do this, it is all the more essential that we should have the fullest powers to control, and, wherever we judge it to be necessary, actually to prevent, capital transactions. We cannot do this unless we have the power to control all foreign payments. That is what this Bill empowers us to do.
The line between current and capita] transactions is hard to draw. That does not mean that it cannot be drawn. We will do our best, and the agencies operating under this Bill will have to do their best in fairness, but, in order that that may be done, we must have wide power to control all payments. This Bill, as has been said by one of the "newspapers which I have quoted, is a conservative and consolidating Measure. It makes no major change in present arrangements. Substantially, it puts into permanent statutory form the Defence (Finance) Regulations. which have operated with practically no friction or criticism, as I think hon. Mem-

bers will agree, for seven years. [AN HON. MEMBER: "There was a war."] Quite true, there was a war, but I was not talking about war, but about friction and criticism, and I said there was none. [Interruption.]Why should the hon. Gentleman try to stir up trouble because the war is over? I have a quotation waiting—and I am exceedingly anxious to sense the collective views of hon. Members opposite—a quotation which I think will be instructive. What I was saying was that, for seven years—and hon. Members are quite right in their historial researches; there were seven years of war—these arrangements met with no criticism or objection of any kind. We are making these arrangements permanent in form because no man, in my view, can foresee the date when it would be safe to relax them. On the other hand, they could be partially relaxed and broadly adjusted from time to time, if the conditions of national safety permitted. They can be adjusted within the framework of this Bill by the issue of new Treasury orders.
Subject to a few modifications, the Bill consolidates and brings up to date the wartime Regulations. The powers which it gives to the Treasury are wide and strong, as they must be, but there is no intention that the Treasury should seek to control every transaction, and many items which, on the face of the Bill, would seem to need Treasury permission, will, in fact, take place without reference to the control, because it is our intention to issue Treasury Orders under Clause 31, substantially on the lines of existing Orders governing these matters, and, in other respects, authority will be delegated by the Treasury to the Bank of England and to other banks to deal with particular cases. Treasury Orders could not be put into the Bill, as has been suggested, without making the Bill, on the one hand, immensely long and unwieldy, and, on the other, without denying us that flexibility and quickness of action, if need be, which is indispensable if we are to counter the manoeuvres of unscrupulous persons, sometimes advised by very able legal advisers.
We must be prepared to act at short notice when new holes are bored in the national financial defences by the clever legal advisers of unscrupulous wealthy men. That is the justification for maintaining that flexibility of procedure by Order, which would be completely aban-


doned if it were necessary to proceed toy means of an amending Bill. This argument has been put in other contexts, and I am now putting it in this context. The public may be confident—at any rate, I give them my assurance that they may be confident—that the Treasury will continue to interpret this Bill and the Orders under it, with the same practical good sense with which they have, in the past seven years, interpreted the wartime Regulations.
The whole purpose of the administration of the control, while safeguarding the national interest with regard to our foreign exchange resources, will be, subject to that, to assist legitimate trade and legitimate private transactions to the utmost. Much authority is already delegated to the banks under the existing arrangements. The present Bill goes further in that respect and permits the Bank of England, and other banks, to act as principals, and no longer as agents, of the control in the buying and selling of foreign exchange.
I would like to pay a tribute to what has been achieved by the banks in general, and by the Bank of England in particular under the leadership and guidance of Lord Catto, in the working and improving of this system of foreign exchange control which we have had to develop and adapt during the seven years of its life. They have had to face shortages of staff and many other difficulties, but they have maintained a very high standard of administration of this control, and their partnership with the Treasury has been most harmonious and intimate. I think that they are greatly to be congratulated on what they have done and on the way in which they have done it. In August of this year I was reading a paper called "The Banker." I quote with appreciation what it said, long in advance of this Bill being before the House:
the Bank of England and the Treasury officials who have built up and operated exchange control have little to learn. Of all the control mechanisms set up during the war, this is the last against which the accusation of controlling for the sake of control can be made. The machinery has been gradually adapted to the needs of a great mercantile community until it functions with astonishing smoothness and rapidity.
I wish the noble Lord opposite would listen instead of reading, because this has a bearing on an interruption made just

now and should be very instructive to him. Perhaps the noble Lord was the author of the article; I do not know. The quotation continues:
The secret of its success is to be found in the principle of delegation, first by the Bank of England to the authorised dealers, then to the bankers and merchants actually using exchange in the course of their business.

Colonel Crosthwaite-Eyre: Would the right hon. Gentleman be prepared to quote the October number of "The Banker" where a subtle distinction is made between the article he has quoted, and the one which deals with our export trade?

Mr. Dalton: I should be very happy to do so, but I have not brought all the numbers of "The Banker" with me. However, I shall be pleased to look it up since the hon. and gallant Gentleman, who follows these matters so closely, draws my attention to it. I think he will agree that the quotation I have read out is very good.

Colonel Crosthwaite-Eyre: the right hon. Gentleman quotes a certain article to suit his own case.

Mr. Dalton: I was going on to quote another from the "Financial Times." I think that the hon. and gallant Gentleman sometimes writes for the "Financial Times. "When the Bill was introduced, the "Financial Times" said:
Of all wartime mechanisms, foreign exchange control arouses least criticism. With all its imperfections, an accusation of controlling for control's sake"—
There is a common element here with the quotation from "The Banker." Was it the same writer?
—"could never be honestly lodged against it. The machinery was evolved gradually, and with care. It was adapted and readapted to the needs of a great mercantile community and earned respect for the smoothness and rapidity with which it ultimately functioned.
I think that the right hon. Gentleman the Member for Bournemouth is the common fount of both these streams, these two very encouraging encomiums on the foreign exchange control which we are asking the House to continue.
I think that the House would like me to describe, in brief outline, the main divisions and provisions of the Bill, and to mention some of the more important changes—there are not many—which it introduces, as compared with the wartime


regulation. Part I of the Bill controls gold and foreign exchange on a basis similar to that in operation at the present time. There is no substantial change. Part II controls payments, whether made inside or outside the United Kingdom. The effect of this is that if a non-resident receives value arising out of a transaction, Treasury permission must be obtained. This, in a sense, is the heart of the Bill. The necessity for this is, I think, unchallengeable in the light of what I said earlier about our balance of payments. Exemption orders will, of course, be made under Clause 31 of the Bill, so that bankers will be able to make payments to or for nonresidents just as at present, and we shall make similar provisions to cover ordinary day to day cash transactions on the de minimis principle. That will be done by means of a special Treasury Order. Part III establishes the control of securities on a basis similar to that which now exists. The general structure is unchanged, but there are one or two minor changes. There are three Clauses in this part of the Bill which I should, perhaps, mention.
Clauses 15 and 16 set out the one important new control which the Bill introduces, and to which I invite attention. That is the control over bearer securities. These anonymous and unregistered securities are an obvious source of leakage of foreign exchange. In order to close this particular drain on our reserves, I am proposing in the Bill that securities of this kind should be lodged with, or placed to the order of, an approved bank. We should then know where they were. This will not affect the ownership of the securities or income from them. The bank will hold the securities on behalf of the owner, and collect the dividends on his behalf, but the actual documents of title will not pass out of the bank's keeping until presented for redemption. We must know where these documents are; I think that the need for this new safeguard is very clear. We have tried to achieve the maximum of essential guarantee of the national interest with the minimum of inconvenience to the owner.
Clause 17 enables the Treasury to keep a hold on dollar and similar securities, and to prevent their being disposed of abroad except with permission. This is all that now remains of the old Regulation 1, which put all such securities at the disposal of the Treasury. Under the old

Regulation there was power for compulsory purchase of any such securities at short notice. We have no longer insisted on the provision for compulsory acquisition, and the provision has. not been reinserted in this Bill. We judge it to be no longer necessary. People who own dollar securities will be under no compulsion to sell them to the Treasury, although they will not be allowed to sell them where they choose, because they still represent an important element in our exchange reserve which we cannot afford to see wasted. We must protect ourselves from their being disposed of abroad, unless such disposal is in the national interest.
Part IV proposes restrictions on the import and export of items which, for the purpose of this Bill, are the equivalent of money—Treasury Bills, Bills of Exchange, postal orders, etc. These must clearly be controlled no less than money itself. This part also contains an important provision enabling the Customs and Excise and the Bank of England to make sure that exports are paid for within a reasonable time. It is a necessary corollary of our control over imports, and since we must husband our exchange resources—this is the primary purpose of the Bill—in order to plan our imports to the best national advantage, it is equally true that we must strengthen our resources whenever we can by asking for prompt payment on our exports.

Colonel Crosthwaite-Eyre: Would the right hon. Gentleman please expand that part of the subject? What provisions are in this Bill to make sure that exports are paid for; and what action is the Treasury to take under the Bill to make sure that those payments are made?

Mr. Dalton: It would not be convenient for me to go into the matter in too much detail here, but, broadly, the answer is that this is a part of the Bill in which present arrangements are being maintained. There is no substantial change here in the present arrangements in which the Bank of England, as I have said, and the Customs and Excise work together very harmoniously. We must have documentary evidence about exports on the one hand, and payments on the other, and, in the light of our experience in past years, we are able to say that a continuance of those arrangements will work as smoothly as they are working now.


Broadly, this is "the mixture as before,' and up till now, it has been very beneficial to the patient.

Mr. Bowles: Supposing an English resident in France gave to a Frenchman a cheque on an English bank for £10,000, and the Frenchman put it in his pocket until he came to London when he cashed it at the English bank, how would the Treasury deal with that case?

Mr. Dalton: I am anxious not to go on too long. I think we would be able to keep a check on that, but I would rather not elaborate it here because, after all, we shall have an opportunity to go into these details on the Committee stage. In this part of the Bill we continue to rely on the existing arrangements, which, I think, have served very well so far.
When we get to Parts V and VI we get a miscellaneous collection of supplementary provisions which, no doubt, will be more conveniently discussed on the Committee stage. I have already mentioned Clause 31, which is important and enables the Treasury to issue exemption orders— a power which will be freely used—in order to relax the requirements in the Bill from time to time in regard to the various classes of transactions. I repeat that this power to issue exemption orders will be used as freely as circumstances permit, with no desire to keep a tighter control than the national interest demands. Then we come to the Schedules which are ancillary to the Bill. In passing, I would mention the Fifth Schedule dealing with enforcement. The powers of enforcement are stringent, and, unfortunately, experience has shown that they must be so. Many people try to find means of evading exchange control; the Treasury, therefore, must continue to be able to investigate any transaction which seems to them to be suspicious, and if an offence is brought to court and proved, the magistrates must be able to impose heavy penalties on the offender. The ingenuity of people who wish to avoid exchange control is very great. Many active minds operate on such a subject as this, and I am confident that we shall have the full support of the House in proposing that persons who deliberately subordinate the national interest to their own private pleasure or advantage shall be dealt with summarily and severely if caught. I am sure the noble Lord the Member for Southern Dorset

(Viscount Hinchingbrooke) would support that proposition.
I have been speaking of the mechanics of the Bill and have given a brief picture of its provisions. It is impossible to discuss them in detail without becoming technical, and that we shall be able to do in Committee, but, looking at the matter broadly, it would be wrong to regard this Bill as a negative and restrictive instrument. It must impose restrictions, but it is intended to be an active and positive contribution to this new era of exchange, stability and expanding trade. [Laughter.] But it is, really. The hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) may find it difficult to understand, but it is so designed because unless we can safeguard our balance of payments we cannot expand our trade. The hon. and gallant Gentleman moves about the City and must know that that is true. The maintenance of our balance of payments is an essential condition, both for exchange stability and trade expansion, as all the newspapers to which I referred earlier all recognise. [HON. MEMBERS: "All?"] All that I have quoted on the subject, and I quoted a good number.
It must not be forgotten that one instalment of the larger freedom which we are seeking to make possible—and it cannot be made possible otherwise—is already in existence in the form of what is often called the sterling area. I wish to make it quite clear that no payments within the sterling area are now or will be, within the Bill, subject to our exchange control. The sterling area, so far as we are concerned, is free of exchange control. The expression "sterling area" is not in the Bill, but the House will observe that the First Schedule of the Bill contains a list of what are called scheduled territories, and the scheduled territories in the First Schedule are, in fact, the areas comprising what we call the sterling area. The word "flexibility" is often used, and some may think misused, but here let me say that we know not what the future may hold, and it is, therefore, necessary that we should have power either to add to the scheduled territories, or to subtract from them. I will give no names in either connection, but it may be that we should desire to modify the list of countries in the scheduled territories, either by addition or subtraction, and


that power we take under the Bill. Sterling is a great international currency and we seek to make it greater yet. It is gladly used, even today, over large parts of the world, and we aim to maintain this stability in the achievement of which we believe this Bill to be an essential weapon, and to extend its use. No Chancellor of the Exchequer can desire other than to preserve and strengthen the international standing of sterling, and to protect it from attacks by speculators, whether alien born, or unworthy British citizens. That the Bill will assist us to do.
Moreover, we are in good company in thus legislating. Many other countries have based their practical administration upon our example. We in this island are very good administrators. Many people have learned a lot from us in this field, and will learn more in days to come, and many countries have based their exchange control arrangements on our model, which is most efficient. Our exchange system is already paralleled in many parts of the Empire, and also in many foreign countries. The New Zealand legislation on this subject dates back to 1936, and the Canadians have just passed an Act of Parliament which is very similar to that which I am now submitting to the House. The Australians are still operating under wartime regulations similar to ours, but I expect that they also will legislate broadly on these lines. Most of the wartime systems of exchange control within the Empire were very closely modelled on our own defence regulations which this Bill is now replacing, and I hope, therefore, that, moving forward at this stage along the lines that have been marked out by experience and have been proved to be effective in the national interest, we shall find many other countries moving forward with us on the same road. The goals to which we are moving are a more assured stability in our balance of payments and our rates of foreign exchange, and a greater expansion of our trade. I had hoped that the Opposition would have united with us in support of this indispensable Measure of national financial defence, because that is what it is.

Mr. Henry Strauss: May I interrupt, because I think the point concerns a subject from which the right hon. Gentleman is

moving? In an important passage in his speech, he mentioned the difficulty of distinguishing between current transactions and capital movements, but he said that the distinction had to be made and that it would be the task of the Treasury to make it. Having regard to the reference to current transactions in the charter of the International Monetary Fund, will it be within the power of the right hon. Gentleman or the Treasury to make that distinction unfettered?

Mr. Dalton: It has been found beyond the wit of even of the ablest lawyers to give a completely watertight definition of any practical value—and I think hon. Members opposite will agree with this—of current transactions on the one hand and capital transactions on the other. They do undoubtedly shade into one another. If the hon. Member proceeds abroad with sixpence in his pocket—I assure him I am giving this illustration quite abstractly—it is reasonable to suppose it will be spent entirely upon current transactions. As the sum gradually rises, doubt also rises as to how far it is not in fact a capital movement; and if any person instead of taking sixpence were to take £600,000, there would be no doubt when that point was reached that it was in fact a capital movement. I think all hon. Members will agree with that. At the same time, it would not be easy to name an exact sum which, in given conditions, represented the dividing line. For this reason we must fall back upon experience and common sense, I suggest. Nothing in the constitution of the Monetary Fund suggests that a hard and fast line can in fact be drawn. As a line can be drawn between light and darkness, when we have a period of twilight, so here we must leave it to the practical sense of the administrators, subject to the democratic procedures of criticism and comment, to ensure the thing is properly done. I hope I have met the point raised by the hon. and learned member.
I must emphasise that this is, in our view, a Measure of national financial defence, and I had hoped the Opposition would vote for it as readily as they would vote for the Army Estimates. I think that at first they were inclined to do so, but it appears they had second thoughts. I see there is an Amendment on the Order Paper, which complains that the Bill is permanent. As to that, I have already given reasons why in my view it must be


permanent. I cannot myself fix a date; and I do not know if the right hon. Gentleman who is to reply can fix any date in the future when he fairly considers it would be safe to relax this control altogether. I can think of no such date. On the other hand, I think I have already explained that there will be opportunity for review. There are constant opportunities for review, whenever a Treasury Order of any major importance is made under a Bill. If hon. Members will look at the Bill they will see that except for Orders covered under the Sixth Schedule, which are of relative unimportance, Treasury Orders must be laid before his House, and may be prayed against and discussed. This will offer many opportunities for review. It would also be perfectly possible at any time, in Committee of Supply, to comment adversely upon or to praise, as the desire may be, the administration of the Bill, because the annual expenses of the Control are carried on the Treasury Vote. All the ordinary parliamentary procedures are open to any hon. Member of the House. I hope, therefore, that in the light of these considerations the Opposition will not press the Amendment to a Division.
I notice that the Opposition are calling in the back benches to redress the balance of the Front Bench. I see the name of the hon. Member for Chippenham (Mr. Eccles) down to the Amendment. He does not sit on the Front Bench, and I think that is a pity. When the Labour Party were in Opposition, we used to bring forward our young men; we did not just trust to the tired "Old Guard" of ex-Ministers. We used to have democratic elections in the Labour Party, and all sorts of people were chosen from the back benches to sit on the Front Bench. [HON. MEMBERS: "All sorts?"] All sorts of people, certainly; all virtuous and admirable in different ways, and with a great variety of talent. Surely there are some hon. Members sitting on the benches behind the Opposition Front Bench who might be promoted? I see that the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan), in seeking for a new title for the Tory Party, suggests they might be called the "Democratic Party." Cannot they, at any rate, make a start by having democratic elections such as we used to have? They might then give the

hon. Member for Chippenham a real chance, instead of expecting him to get up, not exactly below the salt, but behind the Front Bench. I think that is a very derogatory position in which to place so brilliant and able a young Member. However, that is their affair. I am only making a few suggestions based upon our precedent. The Conservative Party follow precedents to some extent, but our precedents as the Opposition party in the past, have been much more democratic. But we are very glad to know that their young bloods are being given a bit of a run.
If the Amendment is pressed to a Division, I can only say I regard this as a Measure of the utmost and most vital national importance, and I ask all hon. Members who support the Government to support us in the Division Lobbies. In the face of what I have said, I hope the whole House will recognise the national necessity for this matter, and that the Bill will go through by common consent.

4.35 P.m.

Mr. Assheton: Except for the concluding passages of the Chancellor's speech, in which he touched upon matters which did not concern him, I think the House will agree he has presented the Bill, as he always does, with great clarity for the benefit of those hon. Members who have not had so long to study it as he has had. I am sure he will not mind my saying that we feel we have had only a very short time in which to study it. This Bill was printed only on 13th November, and here we are already debating it. It is a highly complicated and technical subject, with which I venture to suggest no hon. Member of this House is fully acquainted. I think it would have been courteous to the House, and certainly more satisfactory, if we had been given a rather longer interval before the Second Reading Debate. I hope the Chancellor will make representations to the right hon. Gentleman the Leader of the House, because I know very well that, as likely as not, this matter was not entirely within the Chancellor's personal control. There really can be no suggestion that the matter was urgent, because the Chancellor has already the power for carrying out some of the very necessary business which this Bill governs.
I am sure no hon. Member on this side of the House can be expected to offer


this Bill a very hearty welcome—[HON. MEMBERS: "Why not?"]—I will proceed to tell the House why not—certainly least of all those who, like myself, believe that the trade and prosperity of this country can never be fully restored until we are able to free ourselves from the octopus of controls, restrictions and regulations which we accepted during war. However, I should like to make it quite clear to the House and to the right hon. Gentleman, that the Opposition recognise the need for some measure of exchange control during this difficult period of transition; but we do not think it is right now to adopt permanent legislation on this subject. That is the point of view which we want to put forward. Therefore, I suggest to the Chancellor that he would be much wiser to limit the operation of this Bill to a period of years, so that at the end of the time, there would be automatically the need to review the situation fully, as it may be done here.

Mr. Sydney Silverman: How many years?

Mr. Assheton: I was asked that question by the right hon Gentleman, and I am asked it again. Obviously, it is impossible to say at what period it would be possible to do away with exchange control. I do not know Certainly, if a period of years some time ahead were put into the Bill, it would make it necessary for the Chancellor to come down to the House, and either ask for such a Bill to be continued on the same lines, or to bring in legislation appropriate to the circumstances of the time.

Mr. S. Silverman: How many years?

Mr. Assheton: I would be very glad to accept three or five, but I do not know. That is for the Chancellor to suggest. It does seem to me important that there should be a limit of time. I would hazard a guess, that in a few years' time the Chancellor will want quite a different Bill. Therefore, it seems to me all the more undesirable to put on the Statute Book as a permanent Measure a Bill which is really a consolidation of all the wartime restrictions, which we found by experience during the war to be so useful and necessary for the Treasury. It does not at all follow, that what will be required during the next few years, will be just the same as we have used during the last few years. When the transition period is over, the Treasury will

have to face the problem of what, if any, permanent control ought to be maintained.
There are some who think, as the Chancellor of the Exchequer does, that the movement of "hot money" must be regulated, and that permanent measures will be necessary for this purpose. I shall not now go into the question of prewar short-term and long-term dealing with the Continent, to which the Chancellor referred, except to observe that I do not think that he would put these particular classes of transaction within the definition of the term "hot money," in the sense in which it is generally applied, and which is generally described—in fact, in his own Memorandum I think—as"speculative movements of short term capital "To what extent that definition would apply to these particular transactions, I think, is, at any rate, open to discussion. The Chancellor believes, as many others do outside his party, that some such Measure will be permanently needed. There are others who think it is impossible to devise measures which deal with capital movements only, and that, in happier world conditions, it would be wiser to risk some measure of capital movements of this kind, rather than accept all the grave disadvantages which must necessarily attach to a very complete system of control. Those are two points of view. It is hard to see how capital transactions can be distinguished from other transactions, as the Chancellor has already explained to us in his illustration of the £600,000. So there is something to be said on both sides.
What is the real reason for this Bill? The Chancellor has told us—we are told in this excellent Memorandum—that the object of the exchange control is to pay our way abroad. We are told that we must conserve and allocate our foreign exchange resources and our overseas income in the interests of the community as a whole, so that we can be sure of being able to pay for our essential food, raw materials, and other goods and services which we must import. I am not sure that I am quite convinced by that argument, because is it not really import licensing rather than exchange control, which decides what we are to import? This is a serious argument I am making I am suggesting that the import licensing is the method through which it is decided what is to be imported. A more important reason is given, to which the Chancellor called attention. It is that we


cannot afford to allow capital investment abroad, unless it clearly serves the national interest. Now, the truth is that capital does not feel very safe here just now. I am not sure that that is very surprising, in view of the numerous attacks made by His Majesty's Government upon it, and in view of the complexion of His Majesty's Government, and its activities in nationalisation.

Mr. Scollan: And their lack of patriotism?

Mr. Assheton: I did not say that.

Mr. Scollan: What is there to fear, then?

Mr. Assheton: I beg the hon. Member's pardon. I thought he was referring to the Government The Chancellor has been repeatedly telling us in recent months that the credit of this country is better now than ever before. He has just now reiterated that the prices of gilt edged stocks are higher than ever before. If that is so, it is very surprising, is it not, that capital control is regarded as necessary at all.

Mr. James Callaghan: Not a bit.

Mr. Assheton: One would have thought that money would be rushing here to seek a safe haven, that money would be coming from all over the world, and that it certainly would not want to flow out. But we must remember that the Chancellor has not only a song in his heart, but very frequently has a threat on his lips, and it may be that the owners of capital, including foreigners, are as scared of the threat on his lips, as they are nauseated by the song in his heart:
No lark could pipe to skies so dull and grey.
We Members of the House, however, are realists, and we know we have to deal with this situation as it really is. We know that the Chancellor is romancing about our credit. We know that our balance of foreign payments, as he has himself admitted, is a very serious one. We know that this is, by far, the greatest problem with which His Majesty's Government have to deal, because if they do not deal with it successfully, we shall starve. We are constantly hearing in this House and in the newspapers about world shortages, and arguments go backwards and forwards

between the various sides of the House with regard to these shortages. But I would remind the House that many of these shortages are not really world shortages: they are shortages here in England, because we have not got resources to pay for all we need; and the sooner we get that into our heads the better. I would illustrate this merely by taking the example of timber. There is no shortage of timber in the world. We are very short of it in this country. There is timber in Scandinavia, but we have not got the coal to send to Scandinavia to pay for the timber. One could multiply instances like that, galore. And, what is more, the foreign exchange situation is certainly not going to get easier. It is becoming more difficult, and it is going to become more difficult before very long.
We are at present, as the House knows, living on "tick," thanks to the American and Canadian credits, and when these are exhausted we shall be in a difficult situation. We do not know how long they will last. Perhaps we shall be told later on. At any rate, the Chancellor has reminded the House that on 15th July next year, the sterling resulting from current foreign transactions will become freely convertible, and, perhaps, we shall be told, in the reply, whether the Chancellor is satisfied that we can meet this situation when it comes. It certainly will not do much to relieve him of his anxieties. Of course, we do not know exactly what the position is with regard to the American credit. We know only that 600 million dollars of the credit have so far been used. We do not know whether we are meeting our obligations as quickly as we are collecting debts in foreign currencies. These are all things we want to know, and, perhaps, we shall be told. But it is quite clear, clear as day, that the Government have to take all the steps they can, to increase and conserve our supplies of foreign exchange, and this is their real justification for the Bill. I do not challenge them on that. I only challenge them on making this Bill permanent, and not temporary.
May I, in parenthesis, suggest, however, that we could in some ways be cleverer than we are in the efforts we are making to gain foreign exchange? Much of our exports, for example, are going to the soft currency countries. I know the difficulties about that, but although I


imagine—in fact, I am pretty sure—that the Government, even now, are preparing measures to try to correct this, we are afraid they may be too late, because the time is approaching when the countries in the sterling area will not be as happy to send us imports, except either for goods they need or hard currencies. Then, in addition to that, we are exporting certain goods which, I do not think, can possibly build up permanent export markets for us. If we take the illustration of motor cars, we are sending a fixed proportion, so I understand, of all the motor cars manufactured. It is well known that the small type of motor car is not acceptable, in normal conditions, in most countries abroad. At the present time, of course, people are prepared to buy anything. But I wonder if it would not be wiser to send a greater proportion of the high powered motor cars than of the low powered motor cars. Those are illustrations and suggestions of ways in which to increase the Chancellor's resources.
Then, again, I should like to criticise very severely, if I may, the continuance by the Government of this policy of bulk purchases, because it is, undoubtedly, resulting in our buying at higher prices, particularly for certain things, than we should if merchants were making use of their great experience.

Mr. Scollan: Would the right hon. Gentleman please give us an instance where we are buying in bulk something that could otherwise be bought much cheaper?

Mr. Assheton: There are several instances; rubber would be one, and linseed another. On some other occasion I would like to have an opportunity of discussing the question of bulk purchases, but I think if we pursued it at any length now, we should be out of Order. There are a number of instances I should be prepared to give in which the Government have been paying more for a commodity than would have been paid if the ordinary process of purchase through merchant houses in the City had been employed.

Major Bruce: Would that apply to the Canadian wheat agreement?

Mr. Assheton: I really cannot say, but I should imagine that it might.

Mr. Dalton: Do I understand that the Opposition are against the agreement which His Majesty's Government have made with the Government of Canada for the purchase of wheat?

Mr. Assheton: I am not going to be drawn into giving an answer to that. All I am saying is that in my opinion— [Interruption]—I think perhaps it would be better if I proceeded with my speech

Mr. Richard Adams: How is it possible for the right hon. Gentleman to give an answer about linseed and not about wheat?

Mr. Assheton: I happen to have considered the question of linseed carefully.

Mr. Adams: Then the right hon. Gentleman has not considered wheat?

Mr. Assheton: Of course I have considered wheat.

Mr. S. Silverman: What is the answer?

Mr. Assheton: I am not going to give an answer to oblige the hon. Member for Nelson and Colne (Mr. S. Silverman). I still maintain that we are wasting our resources by bulk purchases. Another point I should like to refer to is the use of our resources, particularly with regard to Germany. How much of our German commitment is a dollar commitment? We have not been told, but it is obviously a serious part of it, and I feel sure that the Chancellor and the Treasury must be doing everything they possibly can to reduce it as soon as possible. All these realities do make necessary the continuance of some form of exchange control, and I would emphasise once more that our opposition is not to temporary control, but to the fact that there is no time limit in the Bill.
As hon. and right hon. Gentlemen on this side of the House have been emphasising during the last 10 days or so, we are approaching a very serious situation, and it is only right that the country should be warned of that approach. If the Government do not take the necessary steps we shall be faced by a heavy economic and financial crisis, which can only be avoided if the Government succeed in increasing production and vastly reducing expenditure. They must give incentives to work and to save. The Chancellor must impress upon his colleagues in the Cabinet that the Government are trying to carry out varying policies which cannot be re-


conciled. The policy of increasing expenditure in many spheres cannot be reconciled with the need to economise. There is no incentive to work when taxation is so high. People cannot be expected to save money when the return on it is so small, and when the fear of inflation makes them wonder whether the money they get back will be as good as the money they put in.
The Chancellor and the Government must choose the path which they will follow. The Chancellor cannot keep on following conflicting policies—that is the "doctor's dilemma." I beg the House to remember that on previous occasions when there has been a serious financial crisis in this country, we have always been supported by the possession of vast resources overseas, which were available to guarantee our deficit on overseas payments in case of need. Those resources have been dissipated, as the Memorandum to the Bill shows. Our investments abroad have largely been sold and converted into dollars. Many of our ships have been sunk, many of our invisible exports have disappeared, and in their recklessness the Government did not hesitate to throw away the foreign exchange which the Chancellor admitted could have been earned if the Liverpool Cotton Exchange had been continued.
We on this side of the House do not doubt the seriousness of the problem, and we do not deny the need for control of foreign exchange today. But this Bill gives the Treasury exceedingly wide and permanent powers. A great many Clauses of the Bill begin with the words "Except with the permission of the Treasury." In fact this is an enabling Bill, rather than a piece of normal legislation If we pass it as a permanent Measure, we are abdicating for ever, the rights of this House in these matters, in favour of the Treasury. That may be right and necessary for a short time, but it is monstrous to seek such wide powers permanently. We in this country only grant dictatorial powers for a certain length of time, and it is impossible to imagine a more dictatorial Bill than this. Without the permission of the Treasury no one can travel abroad, and I am bound to say that that is leading us into all sorts of extraordinary situations in which there are foreigners anxious to come here but unable to get the money to spend, just as people

here cannot get the money they want to spend abroad. The limit of £75 in that connection is something the Chancellor might well look into. Without Treasury consent no one can bay or sell anything abroad—for ever, under this Bill. Without the permission of the Treasury no one can buy a book from abroad. or send £5 to some friend or relation, unless it is a friend or relation who happens to live within the "scheduled territories"— which is the euphemism now to be used for the sterling area. The scheduled territories can be altered at will by the Treasury. They can be reduced or expanded as the Chancellor likes. In those circumstances I hope that the House will insist that this Measure should be brought up for review after a certain time.

Mr. Callaghan: Will the right hon. Gentleman tell us what period of time he suggests should be put into the Bill?

Mr. Assheton: The Chancellor has a much greater knowledge of the present financial situation than any hon. or right hon. Member on this side, and is therefore much more able to suggest a suitable date.

Mr. Dalton: I have suggested eternity.

Mr. Assheton: The Chancellor says he wants it eternally, but he has never gone so far as to suggest that the serious difficulties with which we are now faced will last eternally. There will come a time when this matter should be reviewed, and I suggest that the House should not give permanent powers to the Executive in such a great degree as this. Anyhow, we on this side of the House will press for a Clause limiting the duration of the Measure.

Mr. S. Silverman: If the right hon. Gentleman is not prepared to accept the advice of the Chancellor who, he says, knows more about it than he does, to have the control permanently, surely the onus is on him to say what ought to be the period, shorter than eternity, for which he would accept it? That surely becomes an onus easier to discharge if, as the right hon. Gentleman says, he is prepared at a later stage to move a Clause to that effect.

Mr. Assheton: When the hon. Gentleman looks at the Amendment which we shall in due course put down, he will see the number of years we propose.

Mr. Silverman: Why not tell me now?

Mr. Assheton: Why should I?

Mr. Silverman: Why not?

Mr. Assheton: The hon. Member will be able to see when the Amendment is put down. I was about to observe that the House has always insisted on its right to keep control over the Executive in financial matters. Every year we have an Army Bill, without which the Government cannot continue to keep the Armed Forces. I have never heard it suggested, because we shall always want an Army, that powers of that sort should be made permanent. It is not consonant with the general line which this House has taken throughout the centuries. I hope that, on this occasion, we shall not depart from precedent as badly as all that.
I should like to ask the Financial Secretary to the Treasury, or whoever is to wind up this Debate, one or two questions. Is he quite satisfied with the position of foreigners under this Bill? Once it has become an Act, will any foreign capital come into this country? There is not even a bit of cheese in the shape of a high rate of interest to lure the mouse into the trap. I doubt whether the encouragement given to foreign capital to come here is such that it will lead to much business. Will it be permissible for holders of American securities to exchange amongst one another? Will switching of securities again be allowed? It might well be that profits might come to this country from such transactions. I should like to ask also whether his Department have considered all the technicalities which are involved in the question of the deposit of bearer securities with banks. Is he sure that all the proper arrangements have been made to enable the holders of American registered certificates conveniently to obtain their dividends under the new conditions?
The holders of bearer securities are not likely to be very pleased with the new impositions placed on them, and therefore it is all the more necessary to see that the arrangement is a practical one. Is there any possibility of renewing our arbitrage business, with foreign countries, which enabled us to earn foreign exchange in the past? Will the shrewdness of our dealers in foreign markets be allowed to show itself, and will arrangements be made for revolving credit to enable them to buy

and sell again overseas, thus bringing in more overseas exchange? I should like further to ask whether the one cent spread between buying and selling rates for dollar securities will be narrowed, and whether other currencies will have a similar reduction. The present margin seems excessive.
To all these questions we should like to have an answer, and if we are unable to have an answer, the Chancellor will know that these are the sort of matters which we shall wish to raise during the Committee stage. When it comes to the Committee stage, we shall want explanations on a number of things. Some of these Clauses are very obscure, and I strongly suspect that only about half a dozen people in England really understand what they mean. I hope that the Chancellor, who has the advantage of being in contact with these people, will give the House the benefit of what he has learned. Meanwhile, our demand is that this Bill should be limited in time, and if it. were possible for the Government to give some assurance on that point, it would alter very much our attitude towards the Bill. Permanent exchange control is a horrible prospect to those who love freedom. [Laughter.] We on this side love freedom, and we consider that it is no laughing matter. Perhaps I may end with a quotation from someone who is sure to command the respect of the Chancellor because of his association with the London School of Economics—I am referring to Prof. Hayek:
Nothing would, at first, seem to affect private life less than a State control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the State, final suppression of all means of escape—not merely for the rich, but for everybody. Once the individual is no longer free to travel, no longer free to buy foreign books or journals, once all means of foreign contact can be restricted to those of whom official opinion approves, or for whom it is regarded as necessary, the effective control of opinion is much greater that that ever exercised by any of the absolutist governments of the 17th and 18th centuries.

Mr. Speaker: Does the right hon. Gentleman move the Amendment on the Order Paper?

Mr. Assheton: indicated dissent.

5.6 p.m.

Mr. Benson: I do not know what effect the speech of the right hon. Gentleman the Member for the City of London (Mr. Assheton) will have on his friends, but it caused a good deal of disappointment to those of us on this side of the House. We are discussing a really important and complex financial matter, and we ought to have had a rather more solid speech from the right hon. Gentleman. The right hon. Gentleman almost entirely avoided the question of exchange control with which this Bill deals. He made a number of niggling criticisms about our balance of trade and trade conditions, but he did not deal with the very fundamental and important problems of exchange difficulties which are bound to face not only this country, but the whole world. I must say that I was extremely disappointed, because I had hoped that the right hon. Gentleman would do a great deal better. He seemed to think that a major factor in exchange control was our balance of trade. It is admittedly an important factor, but the problem of exchange control is very much wider than our unfortunate adverse balance at the present time. He suggested that this Bill ought to have a limitation of three or five years, but does he really think that we shall be able in any degree to relax out control of exchange in three or four years' time, or for that matter, in any measurable period which we can foresee?—[An HON. MEMBER: "It depends on the Government."]—It depends less upon this Government than upon factors over which this country has no control. I will not deal with the various debating points he made; his suggestion that our credit is bad has no relevance. I ask the Opposition, when they seek to limit the period during which this Bill shall operate, to give us more cogent reasons than those given by the right hon. Gentleman. Exchange control will have to remain just so long as free sterling will be unable to meet any and every stress. There are two factors which arise. There is the present strain due to our adverse balance of payments. There are other periods of temporary strain which may be superimposed, and it is just as important that we should have exchange control in order that sterling can meet the temporary maxima of strain, as it is to have control for the permanent strains mainly referred to by the right hon.
Gentleman. What are the ways in which a currency meets strain? It can do it in three ways. It can meet it if there is behind that currency an adequate reserve of foreign currencies, or adequate borrowing powers to obtain foreign currency. It can meet it by depreciation. That is the second way, and there is only one other way left, which is control.
Let us examine the possibilities of these three methods to meet any possible future strain on sterling. How long will it take us to build up an adequate reserve? How long will it be before we can build up any reserve of foreign currency at all, in view of our adverse balance of payments? Then, what is an adequate reserve? What was an adequate reserve in the interwar years is now entirely inadequate, because the adequacy of the reserve is something you must measure against the possible liabilities. These have increased enormously as the result of the war, the major reason being the large increase in the liquidity of the world, this country included. Free sterling must mean the possibility of our nationals sending such capital as they like abroad, and our financial capital is enormously greater than it was before. Our bank balances are something like £5,000 million, as against £2,000 million before the war. In addition, we have £4,500 million of three months Treasury bills. I do not suggest that these figures are entirely additive but they give a picture of liquidity inside this country incomparably greater than it was before the war and which will require incomparably greater reserves to meet any uncontrolled outflow.
There is another matter which ought to appeal to Members opposite. It is not merely our own liquidity which we have to consider. We are the bankers of the sterling area, which is largely the Empire. Sterling area liquidity has increased greatly since before the war. Thus, both for our own liquidity and that of the sterling area, for which we are the bankers, we cannot possibly free sterling until we have reserves which are comparable to this increase in liquidity. How long will it take us to build that reserve? Let us remember our overseas assets are gone, and they were very large in the interwar years, we have an adverse balance and our borrowing powers are undoubtedly strained.
Are Members opposite prepared to meet the strains on sterling by depreciation? If we have a fundamental disequilibrium owing to our price structure, depreciation is necessary. But in a temporary strain, due to capital movements, depreciation is entirely the wrong method. We shall have to meet, in future, such periods of great strain. The sterling area will not look favourably on us, their banker if, in order to meet vivid temporary difficulties—we depreciate sterling and thereby their sterling assets. Although we did not create the sterling area, it has now become something of very vital importance to us. Of the three methods of meeting the currency strain, two are completely debarred, and that merely leaves the third, which is control. It is possible to look forward to the time when we shall be able to balance our payments. Our adverse balance is steadily decreasing, and it ought not to be many years before our adverse balance, at any rate, vanishes, even if we do not achieve a large favourable balance.
But it is not that particular stress and strain about which I am merely concerned; it is the temporary and sudden strains that occur as they occurred in 1931. We cannot guarantee that those strains will not occur so long as the world is in its present state of disequilibrium. How long will that state of disequilibrium remain? Will the right hon. Gentleman opposite say that we shall see the end of it in three, or five, years?

Mr. Assheton: What I said was that we wanted an opportunity for review. I do not suggest that in three years we shall not want some form of exchange control. I do not know what we shall want, but I want an opportunity for review.

Mr. Benson: The right hon. Gentleman knows that there are opportunities for debating anything, and that no Act of Parliament is permanent. Every Act rests on the consent of this House. What the right hon. Gentleman and his friends are worrying about is the knowledge that it will be so many years before they sit on the Treasury Bench, and before they can attempt to modify the Act which comes out of this Bill, except by the consent of a Labour Government. It will take a generation before the world can move forward to any real state of equilibrium. After 1919, following a war which was far less destructive and disturbing than the last

war, we were not out of disequilibrium in 20 years. It was hidden, covered up, in the first years after the war by the enormous outflow of American loans. The world seemed more prosperous and more stable than it was. But immediately those loans stopped the disequilibrium appeared, and in the 1930s, three-quarters of the world had to resort to exchange control. If we can make as much progress as before the last war, it will take 20 years before there is any real international financial stability. It is true that in the interwar years sterling was free, but compared with the present, we had infinitely greater foreign assets, and the liquidity of ourselves and the Empire was a great deal less. There is no possibility, within measurably short time of this country, which is subject to every financial blast which blows across the world, being able to dispense with exchange control, certainly not until the world can guarantee the control of trade recession. Trade recession must inevitably mean a very heavy drain upon sterling, far greater than before the war.
Although many other countries will also attempt it, I think that it is highly probable that, with our far greater technique, we shall succeed in stabilising our national income in times of depression far better than most other countries. That means a heavy adverse balance of payments on our own account. Again the immediate effect of trade recession is that short term foreign balances are repatriated on a considerable scale. That will inevitably affect London both directly and indirectly. Furthermore, one mark of depression is a very catastrophic drop of primary prices. Whenever there is a recession, the balance of payment of primary countries is inevitably adversely affected because of this fall in primary prices. The sterling area is a great primary producing country, and we are the bankers of the sterling area. As more than half the trade of the sterling area is done with non-sterling countries, it means that in addition to meeting our own adverse balance of payments we shall, in any future slump, have to face up to the problem of meeting large drafts on London on behalf of the sterling area countries.
Reference has been made to the effect of 1931, when we were driven off gold. True, it was mainly French money that drove us off; but compare our position then and now. Then we were a wealthy


country with large overseas assets, yet we were driven off gold because of the importance of meeting short-term liabilities, amounting to £200,000,000 to £300,000,000. At the present moment, our liabilities are to be reckoned in thousands of millions of pounds. It is this sort of thing which will cause additional strain in times of commercial and financial upset in the world. It is this which we have to be able to meet if we are to maintain our position as one of the major financial centres of the world, and the centre of the sterling area. We must maintain exchange control if we are to do it. Abolish exchange control and what will happen? A flood of British financial capital will flow out which will smash sterling.
Do hon. Gentlemen opposite think that the "hot money" problem will be better after the war than it was before? Not unless there is widespread currency control. There is more potential hot money in the world now than there was before the war. People are apt to think of America as a creditor country; she is not. Even on balance of long and short term assets she is a debtor country to the extent of 2,000 million dollars. On short term liabilities, she is a debtor to the rest of the world to the extent of 7½ thousand million dollars. Four thousand million dollars of American gold is earmarked; it does not belong to her. Is anyone going to guarantee that in the next few years America, with her labour troubles and advancing prices, will not be compelled to depreciate the dollar? If they give that guarantee, they are very foolhardy. Unless America introduces exchange control, the mere breath of the suggestion that the dollar was about to depreciate would send vast quantities of "hot money" racing round the world, doing damage and causing upset and disturbance as it did before the war. As the second great currency centre of the world, London would feel the draught. You cannot have a great surge of "hot money" flowing around the world, without London feeling it very severely.
The low interest policy has been mentioned. So long as a low interest policy remains in this country, we cannot afford to give up exchange control. Hon. Gentlemen opposite may not like a low interest policy, but it is a permanent policy so far as this Government is con-

cerned. Possibly that is why the right hon. Gentleman was so concerned that this Bill was likely to be permanent. The cheap interest policy will remain so long as a Labour Government remains, and that means exchange control will be necessary. Judging by the unhappy results of one or two by-elections, where deposits have "gone west," I am afraid that it will be a long time before the parties of this House change sides, and therefore, a long time before currency exchange control will become unnecessary.

5.29 p.m.

Colonel Crosthwaite-Eyre: As a newcomer to the House I think that memories of the first 12 months here must remain much more in one's mind than those—if one is lucky —of many of the succeeding years. In this first year, we have had one Chancellor of the Exchequer, who has in certain sections of this House endeared himself by his candour. I remember- that during the first few months in which I sat in this House he moved the Second Reading of the Bank of England Bill, and how he waved"Let Us Face The Future" before his followers. I remember how the serried ranks opposite acclaimed him. I also remember how, a little later, he introduced the Borrowing Control Bill, when he was less acclaimed, to guarantee that the nation's finances were used in the national interest. Yet during the few months that Act has been operative, we have seen sums of public money flowing, unrestricted, into greyhound racing, whereas firms like Cromp-ton Parkinson, essential to the building programme, have been refused for many months the capital which they need for development. Now we have this third Bill, or what might be called the final act of the Dalton trilogy, to place the whole of the financial structure of this country under the control of the Treasury. We now have this third Measure, which is purely negative in its structure. There is nothing positive in it. It is merely a Bill to perpetuate for an unknown period those regulations that we have suffered and borne willingly during the war. The Chancellor was kind enough to give way to me on two occasions during his speech to answer questions, but on neither occasion did he advance anything constructive to justify this Measure. He merely relied upon the fact that this series of controls


had proved useful during the war, and therefore, he was going to carry it on in peace time. That was his sole argument.

Mr. Leslie Hale: The hon. and gallant Gentleman said that money has flowed into greyhound racing. Is he aware that all that has happened is that a gentleman has sold his already existing shares in a greyhound racing company? If it is part of the Tory policy to control all prices and transactions, I should be willing to give them a certain amount of support in that policy.

Colonel Crosthwaite-Eyre: That was not the point I was trying to make. My point was that under the Borrowing (Control and Guarantees) Act, we were asked to give the Government enormous powers solely to enable them to direct surplus capital into those things which the Government assured us were in the national interest. Whether it was a case of direct issue or transfer, I do not mind, but if hon. Members opposite are satisfied that the money that is subscribed to a greyhound racing concern is in the national good, let them tell that to their constituents.

Mr. Hale: It was an ordinary sale of shares.

Colonel Crosthwaite-Eyre: If hon. Members opposite think that such a transaction was for the national good, then the whole of the position which they took up on the Second Reading of that Measure is invalidated. We have been given one reason, and one reason only, for the introduction of this Bill, and it is that if it is not passed there may be a flight of capital from this country. I think it was an hon. Member opposite who interrupted my right hon. Friend the Member for the City of London (Mr. Assheton) to say that capital would flow out of this country. I think the hon. Member does a discredit to this country. This country has sustained and survived two Socialist Governments, and I do not see any reason why it should not sustain a third. Whatever damage- may be done to our financial structure by the present Government cannot outweigh that which was done by their two predecessors.
I do not believe that any capital in this country is influenced by such circumstances, but I do say that the Chancellor has to make up his mind which horse he

is backing. At the moment he is rather like an amateur trick rider in a circus trying to ride two horses barebacked, and not certain on which one he is standing. The right hon. Gentleman goes to the constituency of the hon. and gallant Member for North Portsmouth (Major Bruce) and makes a brilliant speech in which he says he has a song in his heart, a speech which gives an enormous impetus to the markets, and then he comes to the House and says that unless he has these controls, the financial position of the country will be ruined. The right hon. Gentleman cannot have it both ways. Either, as he told me last July, in answer to a Question, the flow of money—hot money—to this country is not speculative but is merely due to the improved financial position, to the credit, of the present Government—in which case there is no need for this Bill— or alternatively, our situation vis-a-vis hot currency, the current balance of payments, is such as to cause so much alarm that, unless he can control rigidly and completely present and current payments, this country will be bankrupt. Surely, the right hon. Gentleman should have the honesty to say one thing or the other. Either the position is so strong that he does not need this Measure, or it is so weak that the Government are introducing the Bill tonight as a last desperate effort to save their position.
That is not the main reason I attack the Bill. I attack it because it is purely negative, and contains provisions that may have been, and were, in fact, of use during the war, but which contribute absolutely nothing to the solution of our problems in peacetime. There is nothing in this Bill which will help either the exporter or the importer. The exporter, when he sends goods abroad, will be paid in foreign currency. That foreign currency will not become due until some period, say, 30 days, after the goods are delivered, and the exporter, if he is to be a sound business man, will have to settle his payment of foreign currency by buying it in this country at the time of his deal. The same applies to an importer. If he is to buy fruit, under one of the rare relaxations of the present Government, he will have to buy it against the present payment of foreign exchange, and in his bargain he can make no allowance for what may happen to the exchange of that country between the time of his purchase and the time he receives the goods.
This whole question of balance of payments was, in the days before the war, covered by a free exchange market, a thing that exists today in America, and which enables exporters and importers in America to make all their bargains, whether as exporters or importers, with the utmost freedom and the utmost certainty. This Bill gives no facilities whatsoever for foreign exchange. I put a question to the Chancellor during his speech, and he said that he was satisfied that the Bank of England would fulfil the obligation. One has only to look at those obligations which the Bank are fulfilling. They are prepared at the moment to make limited advance payments against imports or exports in dollars and Swiss francs, but they are not willing to go into any other currencies. Nor do any other facilities under this Bill exist for going into other currencies. Therefore, any importer or exporter, if he is going outside those two currencies, has no means at present by which he can guarantee himself against loss. I do not think I would be wrong in reminding the House of the appalling loss suffered by the firm of Dorman Long when they built the Sydney Bridge. That was a great contract, and it brought much exchange to this country. The fact was that the firm could not set off over a number of years the payment of Australian pounds against the work they did. The result was that when the Australian pound was depreciated by 25 per cent., they lost an appalling amount of money. I wish to ask the Government a question. Under this Bill, or under any regulation that can be framed under any of its Clauses, have the Government any power, or any desire or intention, to help the exporter or the importer by providing facilities in foreign exchange?

Mr. Benson: Is the hon. Member ignoring the fact that we have the Export Guarantees Act in operation—and it has been in operation for years—and that it deals with such detailed matters as he has just mentioned?

Colonel Crosthwaite-Eyre: I am sorry I must contradict that. What we have is the Export Credits Committee, which merely guarantees payment in the currency of the contract in the event of failure to pay the contract, but it has absolutely nothing to do with exchange, and the exchange may depreciate or

appreciate against the exporter or importer, as the case may be, and the Export Credits Committee will do nothing to help the man concerned. Therefore, your remark—

Mr. Deputy Speaker (Mr. Hubert Beaumont): I have made no remark.

Colonel Crosthwaite-Eyre: I apologise, Sir. The remark of the hon. Member for Chesterfield (Mr. Benson) is a facile one, but it has nothing to do with the case. If we are to go into exchange control, then let us go in for exchange control in a way that will benefit our export drive. Let us not perpetuate in our legislation something which is purely negative, which does nothing to help the future, but which is designed merely to prevent the movement of capital through the failure of administration by the present Government. I can assure the House that this Bill is quite incapable of stopping anyone who wants to move capital out of this country, because the one vital provision which is necessary to ensure its being operative in that respect is missing, and that is, postal censorship. Once that is lacking, there is no way in which the Treasury can possibly hope to catch the offender who wishes to commit that act.
I would say that this country, even under the present Government, has either got to have faith in itself or it has to try to become, as the Chancellor obviously wishes it to become, subject to a secret police. We have only got to read this Bill and we will see some extraordinary provisions. For instance, the postman can now be subject to all the penalties contained in the Schedules to this Bill for merely handling a letter which contains bonds which are contrary to regulations. He may not even know that the bonds are in the envelope, but nonetheless he is subject to the full rigours of the Bill. Then we have such provisions as are contained in Clauses 4 and 2, whereby a man is presumed guilty until he is proved innocent. I think I can say that there is no greater contravention of the principles of English law than that.

Mr. Hale: An Act containing such a provision was passed in 1860 under a Tory Government and it has been repeated half a dozen times since. It is hardly satisfactory, I agree, but it is hardly right to blame this Government for being the inventors.

Colonel Crosthwarte-Eyre: The hon. Gentleman has either got the Act or the date wrong because in 1860 a Liberal Government was in power. However, I will not quarrel with the hon. Gentleman. There is a further provision in this Bill to which I wish to call attention. There is, for the first time in any Bill which I have known, a Clause which proposes to lay an obligation on the Dominions. As I understand it, under the Statute of Westminster, the Dominions are independent and they are not subject to any regulations which we in this House may make. In Clause 35 of this Bill the Government propose that any regulation which they shall make shall be binding on the Dominions, and if any Dominion fails to subscribe to whatever this Government may demand, then it is going to be thrown out of the British Empire. That seems to me to be a most extraordinary provision for any Chancellor or Government to make.
There is one thing we have to realise. I agree it is necessary to try to preserve our capital assets and I would be the first to support anything to achieve that if it had the consent of the people of this country, but so long as the Government try to do it by force or by intimidation through making drastic and flexible regulations, which are subject to any interpretation which the Government might please to put on them, they will earn not the confidence of the country but rather the opposite. They will merely increase the number of people striving to avoid the regulations which the Government are trying to put into force. No Government can rule except with the confidence of the people. A Bill like this does not try to win confidence: it tries to bully, and so long as the Government does that it will never win the public support.
If the Chancellor of the Exchequer had come here, far from having a song in his heart and far from saying he had strengthened the credit of this country beyond anything that was ever done before, and told the House that he was really up against it unless he got currency payments and facilities for exports which would enable the people of this country to bring in the foreign currency he badly needs, and unless everything were done to help those people on whom the future of the country depends, he would have got our wholehearted support, but by trying to perpetrate regulations which are

purely negative, and which do nothing for the future, he can only hope to create, as he himself said, another large body of people trying to avoid what he proposes to do. It is for that reason that I shall vote against the Second Reading of this Bill. It does nothing for the future and it merely restricts, so that, far from commending itself to this House, it should never, in fact, have appeared before it.

5.45 p.m.

Mr. Norman Smith: The hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) has complained that this Bill is merely intended to be of a restrictive character and to prevent people from doing what people are disposed to try to do. Moreover, he went on to say that this was not the right way to go about the job, and if his remarks mean anything at all they surely mean that, if all restrictions were withdrawn, nobody having money to handle would do anything in the handling of that money calculated to prejudice the public interest. A suggestion of that sort has only to be enunciated to show how absurd it is. For the rest of the hon. and gallant Member's speech, through the elastic procedure of this House, the procedure of interruption, my hon. Friends the Member for Oldham (Mr. Hale) and the Member for Chesterfield (Mr. Benson) have answered the other arguments of substance.
I should like to bring the Debate back to where it was left by the junior Member for the City of London (Mr. Assheton), to whom I always listen with pleasure, as I think does most of the House, because he is so little of a politician that he is never at pains to dissimulate. He never goes out of his way to hide what is really in his head, and because of that it is possible to do business with the right hon. Gentleman. The House knows where he stands, and that is a very great advantage. The right hon. Gentleman rather let the cat out of the bag, I think, when he said that capital does not feel safe. I do not know whether it does or not, not being a capitalist myself.

Lieut. -Commander Gurney Braithwaite: Oh.

Mr. Smith: I see that the hon. and gallant Gentleman the Member for Holderness has a long memory; but, if I am a capitalist, it is on a very modest


scale. Let us consider this statement of the right hon. Gentleman the junior Member for the City of London when he says that capital does not feel safe, because that statement wants examination and it also wants amplification. If he said it, he said it because he believed it; and if he believes that the capitalists of this country do not feel very safe, it is because he feels they resent this Bill because it prevents them doing something they would like to do. That surely means that he and his hon. Friends are opposing this Bill because it takes away from them some of the freedom, under which they would like to place their own personal financial interests in front of the interests of the country as a whole.

Mr. Assheton: The hon. Gentleman will recall that I admitted the necessity for continuing this control for some time to come.

Mr. Smith: The right hon. Gentleman did, but he also blurted out—I think "blurted out" is the correct term—that capital did not feel safe. Surely, that means that the right hon. Gentleman is claiming for the owners of money the right to take money out of the country if they so desire, even to the extent of embarrassing the financial condition of the country and the policy of the Chancellor of the Exchequer. If that is the attitude of the party opposite, what we, on this side of the House, have to do is perfectly plain. I have considerable means of publicity in South Nottingham, which I expect some hon. Members opposite envy me. and I am going to take precious good care that in the near future the sentiments of the right hon. Gentleman, who is not unknown in my constituency, are made known to the few Tory working men remaining in South Nottingham. I intend to make it clear in South Nottingham that the party opposite want to restore the freedom of individuals to put their own interests in financial matters in front of the interests of the nation as a whole.
I see that the hon. Member for Chippenham (Mr. Eccles) is in his seat. He represents a division in what is my native county, and, unfortunately, he had the support of members of my family, which I regret. Is he going to tell the farmers in the Chippenham Division that the Con-

servative Party stands for the right of individuals with money to invest that money overseas and make what they can from it without any consideration for the national good? The Wiltshire farmers are becoming well aware that much of their plight in the inter-war years was due to the fact that so much British money had in the past been invested abroad, necessitating the payment to this country of interest which it was convenient for this country to receive in the form of food, as has been so eloquently explained in a book entitled "The Breakdown of Money" and written by the hon. Member for Devizes (Mr. Hollis)—again I give publicity to that book, because it is a very admirable book, which really ought to be circulated among the Wiltshire farmers. I do hope that the hon. Gentleman the Member for Chippenham will make it quite clear to them whether the Conservative Party do or do not stand for the right of the individual to do just as he likes with his money, even to the detriment of British agriculture.
The right hon. Gentleman the junior Member for the City of London twitted my right hon. Friend the Chancellor with romancing concerning credit. I will only say that, if a Labour Chancellor of the Exchequer does romance, he does not make quite such a fool of himself as did a Chancellor of the Exchequer during the first world war—Mr. Lloyd George, as he was then—when he went on to a platform and actually boasted that the credit of this country had risen from 3½ per cent. to five per cent. in 18 months! My right hon. Friend does not drop that sort of brick. But there is one thing which the right hon. Gentleman the junior Member for the City of London said with which I concur very heartily. He said that the Chancellor and the Government must choose the path along which they are going to travel. That is exactly what the Chancellor and the Government are doing. My right hon. Friend's speech from that bench this afternoon, coming on top of that delivered the other day from the same bench by my right hon. and learned Friend the President of the Board of Trade, will serve to convince the business community in this country that the present Government not only have their policy, but are sticking to it. I have no doubt whatever that when the next election comes, if the circumstances are anything like they are now, I for one will receive


the votes of far more business people than I did last time, precisely because we have at long last a Government who know what they want and are resolutely determined to get it

5.54 P.m.

Mr. I. J. Pitman: I should like to bring the discussion back to the question of what is the real difference between the two sides of the House. The present Regulations come under the heading of "Emergency Regulations." There are two words there, "emergency" and "regulations." Both sides of the House very much regret the emergency; the real difference is that we on this side regret the Regulations, whereas hon. Members opposite actually welcome them. For the emergency period I subscribe entirely to that article which the Chancellor read out from "The Banker." I think great credit is due to the Bank of England and if possible even more credit is due to the whole business community for the smooth working to which he referred. I am sorry that the Chancellor is not here because (this is not a political point) I am sure he would be the first to pay a graceful compliment to the "Old Lady" even during her spinsterhood and to the City and commercial community generally for the smooth way in which they worked.
The hon. Member for Rugby (Mr. W. J. Brown) very often says that there are only three classes of reasons advanced against Bills. First, that they are not necessary; second, that they are harmful; and thirdly, that they will not work. The hon. Gentleman has a great deal of wisdom and I think he is right in his analysis, but I should like to take this Bill in the reverse order. First, I think that this Bill will not work. To begin with, as has already been pointed out, the only effective sanction for the successful administration of the Regulations lies in the good will and the appreciation of the whole community concerning the necessity of regulations. We had that universal appreciation of the necessity both during the war and during these difficult days of peace, and that has been the essential factor in the-success of the Emergency Regulations — everybody appreciated the necessity for them and was fully prepared to try to work them. However tonight we are talking now not about a period of emergency but about a period of normality. I would define a

normal period as one in which the pound sterling can stand firmly on its own feet, and needs no artificial propping from any other source to support its accepted value. In that situation, it seems to me that the appreciation of everybody for the necessity of regulation falls away, and without the sanction of universal appreciation we will enter upon a situation just such as that of prohibition in America. Already, even with a universal appreciation of the need for regulation, the system is beginning to creak. I would suggest one very good reason why it must creak and show its weaknesses and why those weaknesses are bound to make it unworkable in the end, and I can use the words of the Chancellor himself to make this point. It is as he says quite impossible to discriminate between current account and capital. Do we realise that, in this Bill, because of this fact, the Treasury have to make it impossible for anyone to export even one penny whistle? Similarly, they have to make it impossible for any visiting American even to buy a hat for his wife or to give her any money to live on. I know that it will be said that in point of fact the regulations are to be administered "not more stringently than hitherto" and that the American will be allowed with his own money to buy his wife a hat, or pay her account at the hatter's, but let us at least realise that it is just because of this inability to distinguish between current account and capital account that the Chancellor must first take all these enormously restrictive measures and then relax his will to use them. Let it be clear that there is no such thing as movement of capital accounts. All movements which purport to be movements of capital account are in fact the use of movements of the total of a number of current accounts of a lot of other people. The very essence of capital is that it is destroyed in its use, and becomes the source of goods or services, which are current transactions. Current transactions are the only source from which foreign exchange movements can come because after all, capital is clearly anchored in the place in which it is operated. To effect his purpose the Chancellor must aim at current transactions, that mass of day to day business which will in the long run cause the whole Bill to become unworkable.
When the pound is firmly established on its own feet—which is the normal situation about which we are debating—we


shall have either to allow a complete and general relaxation of the Act's powers—in which case why the permanency?—or to continue the powers with 100 per cent. continuation of applications with virtually 99.9 recurring per cent. of approvals by the Treasury to the applications made.

Mr. Callaghan: Would the hon. Member care to give the House some indication of when he expects to find the pound sterling standing on its own feet?

Mr. Pitman: There are three ways in which—

Mr. Callaghan: When?

Mr. Pitman: Any of those three events can happen easily within the next ten years. One very good reason—and it has also been advanced from the other side of the House—is the possibility of the hard currencies themselves coming into a devaluation. That would immediately reorientate or restate the whole of the problem. If, for example, there were a big depreciation of the American dollar, the whole situation would be radically different, and it is quite possible that the pound could stand and will stand on its own feet in a period as short as ten years. But I think hon. Members opposite are making a great mistake in trying to name a date. The important point about which we are debating is whether these regulations, apart from the unfortunate present-day circumstances of their necessity are to be welcomed, or are to be regretted. That and not the precise period of years is the fundamental difference which divides the two sides of the House.
I come back to my argument. Either there has to be complete relaxation—in other words, the Bill will not operate at all—or the Bill will be operated with complete or practically complete permission to everybody for every request they make to the Treasury. Even in the second event the Act will not work. The very few people whose applications will be turned down will no longer respect the sanctions, and will get round the provisions, whether the Treasury like it or not. I say this because there are two further points which would be essential, in my opinion, to make the scheme work, even if it were possible to discriminate between capital and current transactions. One is a permanent postal censorship, and the other is the searching

of luggage at the port of departure from this country. Without those two measures, quite apart from anything else, it is clear that the Bill will not work.
Already there is very large scandal over the £75 that is allowed for overseas travel, and it is to small people. It just shows where we go, when there is no general sanction behind an Act of Parliament.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): Will the hon. Gentleman tell the House what happens now?

Mr. Pitman: I have not quite caught the point of that interruption.

Mr. Glenvil Hall: The hon. Gentleman said that the Bill would mean postal censorship, and examination of baggage at the ports. I asked him to tell us what happens now.

Mr. Pitman: I went from this country to America on the "Aquitania" very recently. I went abroad without the slightest difficulty, and without any attempt being made to see whether there were notes, currency or bearer bonds in my luggage. That is what happens now.

Mr. R. Adams: I hope that the hon. Member has a clear conscience.

Mr. Pitman: I have quite a clear conscience. I did not attempt to do anything illegal.
I come now to the question of the harm which this Bill will do. The result of what the Government are now trying to do in normal rather than emergency situations will undermine respect for the law. This is grave moral harm. Again it is hypocritical of His Majesty's Government to say, as they do in that Memorandum, that with this Bill they are aiming not at current account, but only capital account, transactions. What will be the view of the American, or of any foreigner, who sees that the Bill provides that he may not go and buy his wife a hat, and that no-one can export a penny whistle, without the consent of the Treasury? Is that not stopping current account? Of course it is. His Majesty's Government have got to do so. They know it, and that is why they are doing it. This may be so but to my mind it is a harmful thing for His Majesty's Government to pretend that they are not doing what on the face of the Bill they are doing and that pretence will undermine public confidence. It will


furthermore undermine the view that is held of us in other countries. I am sure that sooner or later there will be a scream about it, from the other side of the Atlantic.
As well as the moral harm there is the physical harm that it will do to our standard of living. London has been the financial centre of the world. As well as the invisible exports which pay for bread, housing and other matters, and are an important contribution to our standard of living in this country, there arise from London being a financial centre further advantages in the form of undeclared dividends. The information which comes to London is of great value in peace, in the building up of trade. Money comes from overseas from one lender, and is lent by the City of London to a borrower for some commercial transactions, and the information of that transaction is available in London. If the history of the Ministry of Economic Warfare were gone into, I think the enormous value to us in war, as well as in peace, of the City of London remaining if not the centre at any rate an important financial centre of the world, would be apparent. The harm to the aim of maintenance and raising of our standard of living will be very great. The Chancellor of the Exchequer will be forced, in the long run, to choose between the two horns of a dilemma. He will either have to abandon his big stick against the foreign lender and have to let money come in freely and go out freely, and so encourage invisible exports, or he will have to give up the benefit of using other people s money because he wishes to control the process completely. Let us not "kid" ourselves. The foreigner will not use London so long as the Chancellor has these powers and a blank cheque to use them without notice. There is no such thing as hot money. There are only hot situations. Hot money does not exist of itself. The only two cases in my knowledge where allegedly hot money occurred were in two situations which were hot. The two hot situations were first the product of the 1931 Labour Government, and the second the effect of a big major war of the size of the one that we have just had. Those were the two examples of the hot situations which undermine the expectation of stability for the future, and which lead to money going out.
Remember that it is money coming in —or rather not coming in, as much as going out—which is an important factor, as important as that of the money going out. Whatever exchange Regulations we have in this country we just cannot cover that other part of the so-called hot money situation, the revolvingness of money, the money coming to London at the end of the transaction for re-employment by London. Nothing will force foreigners, if they do not believe in our currency, to lend us their money, and they will certainly take it out and they will not lend it to us again. No, there is to my mind no alternative other than to stabilise the exchanges of the world and make the United Nations organisation and the Monetary Fund work properly. This is the responsibility of His Majesty's Government, to work it properly, and to create such a situation at home and abroad that the £ sterling has a permanent and fore-seeably stable long-term value.
The Bill is therefore, to my mind, trebly wrong. First of all, it will undermine morals. Secondly, it will destroy the power and strength of the City of London in the world money situation, and finally, it will deflect attention from the real duty of His Majesty's Government, which is to conduct the affairs of this country so that the £ shall be stable and so that there shall not be any hot situation of any kind.
I come to my final point, that the Bill is not necessary. Surely, we should all hope that at some time the £ will stand fairly and squarely on its own feet, and have a real rather than a fictitious value. If we do not take that view, that is to say, if the Bill is not unnecessary, then clearly it is a despairing view. I reject despair. This country is climbing magnificently out of its difficulties. I think my 10-year hope is not impossible. I think 20 years ought to be a certainty. We ought then to be on our feet, so that the £ sterling may stand on its own. So, either the Bill is unnecessary or there is some hidden motive behind it. Either His Majesty's Government are despairingly incompetent to introduce an unnecessary law—or incompetently despairing. The only other possibility is that the Chancellor of the Exchequer is playing politics.
I believe that the right hon. Gentleman is playing up to the ignorant and the extremists of the


party who support him. [Laughter.] I ask hon. Members to wait a moment. May I make my point in this respect? He is looking for a scapegoat for 1931. The Bank of England was his Bogy No. 1. Now, finance and the City are his Bogy No. 2. He is arguing that for him to seem not to make a change of what was existent between the wars is clearly to show that it was not the financiers but, in point of fact, the Labour Government of 1931 which caused the great financial crisis. After all, the general public is not financially-minded and this Bill is most difficult to grasp—

Mr. N. Smith: Does the hon. Member suggest that the Labour Government in this country in 1931 was the cause of the stock market break in America?

Mr. Pitman: We are talking of questions of finance. The reason why French money left the country was—this is perfectly clear—that the whole country lost confidence in the Government—[Interruption.] It is only necessary to study the election figures to confirm my point. Not only the electors but even the Labour Chancellor and the Labour Prime Minister lost confidence in the Labour Government. Is it to be wondered at, that, in those circumstances, the poor Frenchman thought he had better take his money out as quickly as he could? The real issue is that we want in future stability for the pound with no more than the 10 per cent. variation. It is surely the duty of the Government to keep British money solid. It is allowed under the Monetary Fund this 10 per cent. variation. If we are to have another hot situation as a result of a Labour Government let us hope that this 10 per cent. variation will be a quicker potentiality than the variation of the price of gold in 1931, and that resignations will be a little quicker and that the country may have an opportunity of showing its confidence or lack of confidence. The fact is that, in 1931, it was a rotten Government who bungled the situation and lost the confidence of everybody. The Government have brought in this measure, in my opinion, not as an emergency but as a permanent measure, in order to pretend that it was financiers rather than the earlier Labour Government which caused the flight from the pound and in order to get them out of what is really their own hole.

6.12 p.m.

Mr. Richard Adams: I suggest that the hon. Member for Bath (Mr. Pitman) should have a talk some time with his colleague the right hon. Member for the City of London (Mr. Assheton) about the present and future potentialities of the pound. It is quite obvious from their two speeches that they do not agree on that matter. Some doubt has been expressed today why the Chancellor should continue to have a song in his heart in bringing this Bill forward. I will quote from a Debate which took place in this House on 30th June, 1937, in connection with the Exchange Equalisation Account when the present Chancellor of the Exchequer said:
Many of us have contended that we should seek more and more to establish stable internal values of national currencies, and relatively stable international exchange rates."— [OFFICIAL REPORT. 30th June, 1937; Vol. 325 c. 1982.]
That, very briefly, is the purpose of this Bill. We can therefore conclude that the Chancellor has every right to have a song in his heart in being the man to bring about a wish he expressed as long ago as 1937.
Unlike some hon. Members who have spoken today, I think this Bill is, in essence, a simple and straightforward Bill. It could be expressed more briefly. We could follow the old streamlined pattern of the Chancellor, and have a simple two-Clause Bill to deal with this matter. The only reason why it is necessary to go into some 44 rather complicated Clauses, is in order to stop up all the loopholes which are disclosed as a result of the two main operative clauses. I should like to ask the Opposition, and in particular the right hon. Member for the City of London a simple question. They have all said that we should do away with the present controls as quickly as possible. Some say very soon, some say in a few years' time, and some are not prepared to set a time limit except that they would not go as far as eternity with the Chancellor, although he would be excellent company to venture with.—[An HON. MEMBER: "The wrong place."] While they have said they want to put an end at some time to the present system of controls, not one hon. Member opposite has committed himself to whether he wants to go back to perfectly free exchanges, or to the system under which the


Exchange Equalisation Account operated in the years before the war. I will give way if any hon. Gentleman would like to answer that question.

Mr. Pitman: Perhaps the hon. Member will agree that the acceptance houses in London have developed fresh techniques and that their lending is coordinated and efficient. If, however, it is purely a question of developing a coordination policy so that they will not lose money— they do not want to lose money—there is no need for an Act for that. We must remember that, and in the borrowing and lending to Germany they were only doing what a Labour Government approved through the Young and Dawes plans. If it is a question of coordination of the working of acceptance houses a Bill of this kind is not needed to do the job.

Mr. Adams: That long explanation has not dealt with the point. The question I wanted answered was, "If we do away with the present system, should we go back to the systems where we had an exchange equalisation account or to perfectly free exchanges?" I ask that because some hon. Members may have noticed that when the right hon. Member for the City of London went out, the right hon. Member for Bromley (Mr. H. Macmillan) came in, but when the right hon. Member for the City of London resumed his seat, the right hon. Member for Bromley went out. I do not know whether that has any significance in this connection—

Mr. Assheton: Tea.

Mr. Adams: I understand that perfectly. The reason I asked the question is that the right hon. Member for the City of London in the same Debate from which I have already quoted said:
We ought not to overlook the fact that this additional E200 million is only a palliative and not a cure, and that the time will very-likely come when he"—
the Chancellor—
will ask us for more."—[OFFICIAL REPORT, 30th June, 1937; Vol. 325, c. 2000.]
In other words, I take it that the right hon. Member wanted to do away with the exchange equalisation account and wanted to go back to perfectly free exchanges. I take his silence as meaning assent. Now we see where the right hon. Member for Bromley comes in, because in the course of the same Debate the right hon. Member for Bromley said that with

perfectly free exchange…you are at the mercy of the speculator."—[OFFICIAL REPORT, 28th June, 1937; Vol. 325, c. 1702.]
It seems to me that these two ought to compose their differences on that issue. Either they want perfectly free exchanges with the speculators operating or they want the exchange equalisation account to operate, which in my view and in the view of most hon. Members on this side merely acts as a shock absorber or buffer and is, in fact, to change the simile, shutting. the stable door after the horse has bolted—

Mr. Assheton: There was a happy time when it was not necessary to have an Exchange Equalisation Fund. That does not say that we can go back to that happy time very easily.

Mr. Adams: It is quite conceivable that one day we can get back to a happy state where we can rely upon the perfectly free operation of the exchanges provided we are living in a world where trading is the only thing that operates and that we are not subject to these speculations which interfere with the proper operation of these exchanges through the normal commercial channels.
I want to refer to the subject of restrictions on trade. Hon. Members opposite are so afraid that as a result of the operation of this Bill there will be trade restrictions. I want to refer hon. Members who think that way to the details of the financial agreement between this country and the United States of America where the following points are quite clearly made. Firstly, in this agreement the United Kingdom undertook to administer quantitative import restrictions so as not to discriminate against the United States of America. That refers to the import licences whereby we shall grant equal rights to America to those we grant to any other country.
Secondly, we undertook to cease operating exchange control in such a way as to restrict current transactions between the two countries. We also undertook under that agreement within a year—that is, since the agreement was signed last July, we undertook by July, 1947, to impose no restrictions on payments and transfers for current transactions with all other countries. We also undertook that within the year receipts from current transactions in the sterling area were to be freely convertible. From that it


seems perfectly clear that there is no intention of restricting payments as a result of normal trading relationships. What is equally important is that, fifthly, we undertook to make agreements regarding the accumulated balances for the immediate release of part of them, for the convertibility of that part, and for the funding of the rest of those balances for repayment starting in 1951, subject of course to any scaling down that can be achieved in negotiations between ourselves and the countries concerned.
Furthermore, under the Bretton Woods Agreement itself, we undertook, firstly, that there shall be no restrictions on payments for current transactions and, secondly, that members may exercise such controls as are necessary to regulate international capital movements. I should have thought that set down our position as clearly as any one could expect. I think it makes it perfectly clear that the Chancellor has no intention of interfering in trading arrangements as a result of this Bill and that, as he says, it is confined to the restriction of capital movements, and to properly limiting the activities of those speculators who, without any regard to the state of this country are merely anxious to line their own pockets as a result of our misfortune.
Now I want to refer to the importance of the future of those sterling balances because, believe me, unless we find a satisfactory solution to the situation created by those sterling balances, this country will be in a bad way. As the House is well aware, there are at present balances amounting to roughly £3,500,000,000. Now assuming that some of those balances remain on deposit here in London, and assuming that we are able to get some of those balances scaled down because they represent part of our war effort, we still have to face the fact that we may be called upon, under our agreement with the United States, to fund perhaps as much as £2,500,000,000 of those sterling balances. If we were to fund such an amount as that at, say, one per cent. repayable over 50 years, it would represent an annual payment by this country of some £60,000,000. If we add to that our obligations under the American loan of £35,000,000 plus the Canadian loan of £10,000,000, it means that, starting in 1951, this country has to find a sum of

£105,000,000 a year to pay off what in effect are war debts. That means that a sum of £5 a year has to be found from every working member of the community, or that every working man and woman in this country has to pay roughly 2s. a week starting in 1951, not for any social benefits, like social insurance, not for savings which will accumulate for their future benefit, but to pay for the fact that we won this last great war. I suggest that the price of victory will far exceed the price paid by the vanquished nations. This question of the conversion of the sterling balances, and their satisfactory settlement, must necessarily be a headache for the Chancellor. Therefore, any Measure he requires in order to see himself safely through this difficult period must quite rightly be granted him from all quarters of the House.
I do not want to take up time unduly, so I must leave that, and come to my last point, which is the one made by the right hon. Gentleman the Member for the City of London. He once more came back to the old cry which is always uttered by hon. Members opposite, the cry for freedom and liberty, the cry for the freedom of the individual. When we have a housing Debate, they talk about the right of the little man to own his own cottage; when they are talking about great financial Measures, they talk about the savings of the small man in the Post Office Savings Banks. This time the right hon. Member came forward and talked about the right to send a small present to one's relations abroad, the right of a visitor to buy his wife a little hat to wear when he went back, and the right to take a little cash when travelling. Of course once again the real issue is obscured under the guise of concern for the little man, under the guise of standing for individual liberty and freedom. What hon. Members opposite really stand for is the right of a few individuals, like the speculator, to have perfect liberty and freedom of action at the expense of the great mass of the people of this country.

Colonel Crosthwaite-Eyre: Would the hon. Gentleman tell us how the small exporter, who wants to send some goods under the present regulations, is entitled to do so?

Mr. Adams: The Chancellor has already explained that legitimate trading will be properly considered. In that connection,


I am glad the hon. and gallant Gentleman interrupted because I have the same quotation as the Chancellor quoted from "The Banker." I will not weary the House with a repetition of this excellent quotation—[Interruption.] Perhaps I will weary the House with it. It says:
of all the control mechanisms set up during the war, this is the last against which the accusation of controlling for the sake of control can be made. The machinery has been gradually adapted to the needs of a great mercantile community until it functions with astonishing smoothness and rapidity.
If, as I am sure he did, the Chancellor went on to read a little further, he would have found that the same article, referring to open licences, went on:
This system is capable of further extension until a point is reached at which the bona fide trader will virtually be unaware of the trammels of exchange control.
That is the answer to those who suggest that any action on the part of the Chancellor will interfere unduly with legitimate trading.

Mr. Callaghan: They are not listening.

Mr. Adams: One cannot expect them to listen, having made their point. If I may, I will return to the picture which the right hon. Gentleman the Member for the City of London and hon. Gentlemen opposite try to draw—this business of advocating the rights and liberties of the little man against the onslaught of the great Socialist dictatorship. What is really the position? I suggest that it is that in all fundamental matters one has to choose between individual liberty and corporate liberty, and although one defends the right of the individual to have his freedom and liberty, we have in the past on occasions had to circumscribe the individual in order to maintain corporate liberty. We recognise the right of the individual to do as he likes, but we have the criminal law which circumscribes that individual right. We recognise the right of the individual to go freely about his business, to trade with whom he likes and how he likes, but there is the whole mass of company law circumscribing his actions. There is the law dealing with fraud, and so on, in order to ensure that individuals are protected against the actions of other individuals. Similarly the right to freedom of speech is circumscribed by the law of libel and the law of sedition.
I hope I have said enough to convince even the Opposition that this great Labour

Party is the party which truly stands for the right of the individual. The right hon. Gentleman the Member for the City of London said there were horrible prospects for those who loved freedom. If by that he means the freedom of the speculator, then there are horrible prospects. If he means the freedom of a few gambling financiers to exploit the livelihood of the masses of the country, there are horrible prospects for them. It sickens me in these Debates time after time to find hon Members opposite getting up under the pretence of pleading for the little man but actually advancing the cause of the big business man and the speculative financier. I am prepared to give my unreserved support to a Second Reading of this Bill. We will have great pleasure in hammering out the details during the Committee stage.

6.30 p.m.

Mr. Spearman: It will be conceded that the Chancellor of the Exchequer has a great power of exposition, but it seemed to me that he was overrating even his own great powers of plausibility when he thought he could describe as "miserable" the days when we made investments abroad. In those happier days of abundance, we made a great contribution to the development of backward areas throughout the world, and helped to enrich the whole world as well as ourselves. "Miserable" as the Chancellor described those days, those investments did on two occasions save this country a great deal. In two world wars, we were able by selling these investments to procure armaments from the U.S.A. before she entered the war, which saved many lives, and may have made a great contribution towards saving this country.

Mr. Dalton: I do not want to enter into the wider question, but in fact I used the term "miserable" specifically in relation to the nineteen thirties, which I was then discussing.

Mr. Spearman: Of course, the Chancellor will agree that he can hardly expect us to believe that the days of 1930, under a Socialist Government, were very glorious.

Mr. S. Silverman: The great pleasures which a small section of the population bought by investments abroad in those


days, were purchased by the misery of great numbers of people who had to stop at home.

Mr. Spearman: I never think that the interjections of the hon. Member are very relevant. However that may be, we must realise that we are not now in that position and cannot afford to divert our resources of men and material to foreign investments at the present time. In those days we strode the world gaily, but now we have to limp very uncertainly. It is a limp of which we can be proud because it is entirely due to the fact that we put our all into the war, perhaps more than any of our -Allies. We expended a quarter of our national wealth and stripped our export trade of workers, and thereby dislocated our chances of recovering our trade for a considerable time. I would like to stress the necessity—which hon. Members opposite do not seem to realise —of facing the consequences of this condition. The right hon. Gentleman referred to "hot money," and I think there was a great deal in what he said. The point on which I interrupted him when he was good enough to give way was with regard to money leaving this country. In those days before the war, there was such confidence in the Governments of this country that there was no "hot money "or" funk money" leaving here. I realise that "funk money" was leaving Europe, but it did not leave this country. The Chancellor's reference seemed to imply some reflection on the confidence in the Governments of prewar days. The dislocation caused by "hot money" is not always sufficiently taken into account by hon. Members on both sides of the House who deride our chances of cooperating with America. They say that America on her record, will always try to sell more than she buys; but in 1935, 1936 and 1937, while there was an enormous flow of gold into America, in each of those three years there was actually a deficit on her balance of payments. In each of those years, America was buying more than she was selling. It was "hot money" rushing in that caused that dislocation. I agree with the Chancellor that steps should be taken to deal with this position.
It is generally realised that unless there is, at this particular time, a measure of control, we should lose our facility for

controlling interest rates in this country. We would have to have high rates to attract money here, and would have to pursue a policy of deflation and perhaps unemployment, to force down wages so a? to protect our exchange. We have to have control now because it is necessary. What we on this side of the House deplore, is how little hope the Government give for the future. There is a feeling among some of us that hon. Members opposite, almost intoxicated by their first taste of power, are l0th to give up those controls, which they regard as a toy with which they will not part very soon. Would it not be better for the Chancellor to spend his energies in creating confidence than an immense amount of effort in preventing abuse? A feeling of patriotism restrains people from attempting to evade Regulations during the war, but if there were a real lack of confidence in this country, it might be very difficult indeed for the right hon. Gentleman, with all the powers he has, to prevent a crisis.
Surely the right hon. Gentleman will agree that this Bill can be no panacea. A man with a broken leg—and I know something about broken legs—needs a crutch, but that crutch is not going to mend his leg. This Bill is necessary as a shelter, but it is not going to cure the position. The vital issue is our balance of payments on which I should like to put four points. What is happening to our exports to those countries who have balances here? I imagine that our exports are now directed, as they should be, to those countries where we shall build up the maximum amount of goodwill and the prospects of continuing to sell in the more difficult years to come. But, if our exports are going to those countries who already have sterling balances, those balances should not be available to them at this particular time. We should make it quite clear that we sell to hard currencies or to people who provide fresh currency.
Secondly, in regard to conditions in Germany, the Chancellor has on more than one occasion said very forcibly what an immense drain it is to spend £80 million, or more, a year, and I agree. We have to realise that we are no longer the Lady Bountiful of the past, but are very restricted and limited in what we can do. This is not the occasion to examine the position in Germany in detail but I would like to make one brief point. We obviously cannot stop spending that money


at present. That would result in a disaster in that country, starvation perhaps unheard of in the annals of history. It would have repercussions here, quite apart from the fact that it would be intolerable on grounds of humanity. But, what we can do is to take steps to see that that country is self-contained and can support itself. We know that factory after factory is being pulled down and we know that business men in Germany are not allowed to make any export plans at all. There appears to be no coordinated policy. May I give a brief instance? The Union Rheinische Kraftstoff, A.G. Wessling, are manufacturers of synthetic fuel. Their raw material is brown coal to be found at Cologne near by. They have been refused a permit. If they were permitted to make and sell that fuel they could supply nearly all the petrol required in the British zone. At the present time, nearly 80 per cent. of--the petroleum in the British zone comes from outside. I am credibly informed that it actually comes from the Leuna Works in the Russian zone. There is a clear instance of an immense strain on our resources, which could be avoided by a more sensible and coordinated policy in Germany.
I wish to make two other points briefly. The first relates to coal. If only we could regain our prewar position, or anywhere near it, in regard to coal, there would be an immense saving on our balance of payments. It seems astounding that we should now have to be using our precious currency in buying fuel from abroad when it is our greatest natural resource. I am told that 100,000 men could cure that position, that 100,000 workers would be enough to supply the needs of this country and put us in clover as regards coal exports. What would be thought of finding 100,000 men in war? In Central Europe there are surely 100,000 men who would come here for British rations and British pay? Why should not the Government, if necessary, give a guarantee to the miners that there will be no unemployment in the mines for the next 10 years? It may be difficult to adopt the suggestion I have made but surely some step should be taken? It seems to me 1hat there is an extraordinary apathy and lethargy. Here is an all important matter which could be cured by 100,000 men.
Finally, I am told that £15 million of barley would produce whisky exports to

the extent of £90 million. I would not suggest that in the present food shortage we should divert, for drink, food that could be used for humans, but if, as soon as it is possible to do so, without reducing the amount used for human food, we could buy that quantity from America, instead of letting them feed it to their beasts, even if we had to pay £30 million for it that would be good finance—£90 million for £30 million. Has the Chancellor borne that in mind? Is it sufficiently realised in the country, or even on the benches opposite, what a terrific gamble it is in which we are involved at this time in trying to get back our production and our exports, sufficiently to buy what we must have to live, before the American Loan is exhausted? I know right hon. Gentlemen often talk about it, but it seems to me to be a gamble for existence almost comparable to the gamble which twice before this century this country has run. Then we won the gamble, but at that time the task was given absolute priority, nothing was allowed to get in its way.
We sometimes have the feeling that perhaps some of the Chancellor's colleagues are more interested in carrying out those Election promises which they may have made at a time when they never thought they would have the opportunity of fulfilling them. I suggest that the position at the present time is so critical that the whole resources of the country are required, and other things should be put on one side, even if that means breaking promises, in order to deal with it. If we fail to achieve a balance of payments by the time the American Loan is exhausted there will be an appalling reduction in the standard of living in this country. The fact that this disaster will bring down the Government can be no adequate consolation for the suffering which will follow. So, it must be the duty of those of us on these benches to make what contribution we can by constructive criticism to steer and guide the Government towards a wiser course than they might otherwise follow.

6.44 p.m.

Major Bruce: I think that the right hon. Gentleman the Member for the City of London (Mr. Assheton), who opened the opposition, was put in an almost impossible position. The right hon. Gentleman's own in-


tellectual honesty told him that the Bill was a perfectly good one, and should be supported. The Diktat of the Conservative Central Office said that as the Bill contained a measure of control he must, of course, speak against it, in spite of the fact that there is an Amendment in his name, among others, standing on the Order Paper which says:
That. while recognising the necessity for a measure of Exchange Control under present circumstances, this House declines to give a Second Reading to a Bill which contains neither limitation of time nor opportunity for review.
That means to say that the right hon. Gentleman had little argument with the contents of the Bill. It is true that he raised a number of questions which he hoped would be answered in due course by whoever was to reply, but with what the Bill does in substance he had little disagreement. He wanted to put a little limitation to it in order to give time for review. Then the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) proceeded to attack the whole Bill root and branch. It seems that what we have been treated to this afternoon is the spectacle of a party opposing a Bill purely because it must oppose controls as such. At the same time, it is a little uneasy about the advisability of opposing controls because the bulk of the people of our country know that they are necessary.
There seem to me to be two basic principles which supply the main reasons for this Bill. The first principle, to us on this side of the House, is that the wealth created by the hands and brains of our people in this country shall be used for the general advancement of our country's economy. That is a proposition for which we, on this side of the House, have always stood. We say that the bulk of this country's goods, in whatever form they are expressed, are produced, by and large, by the working masses of this country, however much the ingenuity of the employers and managers contributes towards that production. We say it is only right that the wealth created in this country shall be used in the interests of our country's own economy. At one time it was argued, and has very often been argued in this House in bygone days, that a man who makes a profit and accumulates wealth has an inalienable right to dispose of it as he wishes, and to send

it into which part of the world he likes for whatever money he thinks he might get for its use. That was the philosophy of the Party opposite, for many years, if I am not mistaken. Then, mainly owing to a series of electoral reverses, members of the Party opposite have gradually had to modify their policy in view of the changing circumstances.
There have, in fact, over the last 100 years or so, been several occasions on which this general principle of the inalienable right of the private individual to the profit which his firm or group of companies may make has, in fact, been abrogated. There is the whole question of Income Tax, which in its graduated scale is an assertion of the right of the State to interfere with the liberty of some individuals in order to effect a redistribution of wealth. A second relevant time when this principle was abrogated was during the recent war, when we had to have some exchange control restrictions. Thirdly, in the life of this Parliament further sanction has been given to this right of the State to interfere with the liberty of certain individuals for the benefit of the whole community, which is, in fact, implicit in the whole series of nationalisation Bills being brought before this House by the present Government.
It cannot be denied that at the present time certain temptations exist for people to take money out of this country if they could do so. The hon. Member for Scarborough and With by (Mr. Spearman) made the point very well indeed that so long as low interest rates obtain in this country, it will be very necessary for some form of control to be exercised. It has not been shown so far from the other side of the House exactly where the specific controls put into this Bill will actually fail in that purpose. We on this side of the House say that it would not be a good thing if any responsible Government, by refusing or neglecting to pass legislation, permitted money to go out of the country in reckless disregard of this country's currency requirements, and also, we might add, of the interests of the country to whom the money was sent.
There is a second principle which, I think, lies behind the whole purpose of this Bill, and that is the necessity for establishing with this country a planned economy. We have already had indications from the Lord President of the


Council that we are going to have some more comprehensive economic budgeting in addition to the ordinary financial budgeting. We on this side of the House were very pleased to receive support in this connection from the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) who, speaking on 20th November last, said:
No Government, of whatever complexion, can dissociate itself from a large degree of intervention, and indeed management, in the economic life of the modern State. We can never return to the old, classical laissez faire."
And a little later on:
It is really necessary to make a plan, a master plan. This is the acknowledged function of government."—[OFFICIAL REPORT, 20th November, 1946; Vol. 430, c. 867 and 876.]
If we are to consider the economy of the entire country, not only in its purely financial aspect in terms of Treasury finance, but also in terms of labour and material, it is very necessary that the Government shall be able to rely on certain norms. It is necessary that the Government should be able to make predictions as to the likely availability of capital within this country, and it would be absolutely fatal to all economic planning, as we see it, if this country were to be subjected to the likelihood of there being large withdrawals of capital from this country to other destinations. It would be ruinous to our own economy. I did detect a faint sense of nostalgia about the right hon. Gentleman the Member for City of London when he referred to freedom. I should imagine that he and his colleagues would say that they had some freedom in the years 1935 and 1936. I believe there was a minor boom at that time in the City of London. All that I can assure him is that there were 1,250,000 people in the country for whom there was no boom and, as the hon. Gentleman the Member for Scarborough and Whitby said, this period of high interest rates, which attracted investments from other countries in the world, was accompanied by unemployment in the country.
We are in for an era, we trust—and we are promised it by the Chancellor of the Exchequer—of low interest rates. We intend to accompany that by a full measure of planned economy in which the controls given us in this Bill form an absolutely integral part, together with the Bank of England Act and the Borrowing (Control and Guarantees) Act.
There have been several efforts by hon. Gentlemen on the opposite side of the House to draw red herrings across the trail of this Bill. It has been said that the normal flow of current transactions is likely to be prevented if this Bill is passed. I do not know whether hon. Gentlemen opposite have read Clause 31 of the Bill, which says:
Any provision of this Act imposing any obligation or prohibition shall have effect subject to such exemptions as may be granted by order of the Treasury, and any such exemption may be either absolute or conditional.
Does anybody on the Opposition Benches really think that the Chancellor of the Exchequer, whose problem it is, at Budget time, to make as many concessions as he can, having regard to his commitments, will apply these regulations in any manner other than that which will benefit the Treasury? If it benefits the Treasury, not only on a long term basis, but also on a short term basis, then we shall get fewer complaints from hon. Members opposite when it comes to Budget time.
There are also further safeguards which should be emphasised. I refer to the whole list of scheduled territories within which entirely free transactions can take place. Hon. Members opposite talk very often about Empire preference and trade within the Empire. I should have thought they would have been very pleased to see this provision. It seems to me that this Bill is thoroughly good in every respect. I think the House as a whole should support it. I invite the right hon. Gentleman the Member for the City of London to cast off the shackles of the Conservative Central Office and to get his colleagues behind the Government on this Bill.

6.56 p.m.

Mr. Charles Williams: I congratulate the hon. and gallant Gentleman the Member for North Portsmouth (Major Bruce) on one fact. I refer to the point in his speech when he said words to the effect that anything that benefited the Treasury was good. I hope I shall never hear him pressing the Government to make any concessions—because that could not possibly be good for the Treasury. Speaking frankly, I came here today, having read the Bill carefully and having done my best to find out what it was about, in the hope that, just as on a couple of occasions last week I supported the Government for the


national good, I would find that the Chancellor of the Exchequer would be able to persuade me that it was for the national good to support this Bill. I am only too glad to support a Bill if I think it is really good. Only last week it was explained how a Bill was good and I supported it. I would do the same today. I was not very far from thinking that I might be able to support this Measure until I happened to hear the speech of the Chancellor of the Exchequer. In that speech he was gloomy and he did nothing to encourage me. He was not like the President of the Board of Trade who, in a recent speech, explained at the beginning how well we were doing.
The first thing the Chancellor did was to draw my attention to the position of the overseas deficit. That deficit is in a very bad position. I knew it was very bad, and so did many of my colleagues, But I doubt if anyone realised before the right hon. Gentleman's speech that it was anything like as bad as he made it out to be today. There he dashed to the ground my hope of being able to help him. I thought the position was exaggerated before, but now I realise how serious it is. I listened to the Chancellor with patience. He then said certain things with which I could agree. I do not for a moment think that the time has come when we can take off many of the regulations which are now operating. I do not think the time has come in which we can have limitless foreign loans. I have been in considerable trouble with hon. Members on my own side of the House on more than one occasion because I disliked foreign loans. I remember very well indeed being in that position with regard to the Austrian loan, and I divided against the then Government. In other words, I have always felt that British capital should be used first in the British Empire. We have obtained a great deal of trade, money and employment by the right use of our money in loans abroad, but the fact that for an unlimited time we shall not be able to do that is not one that is encouraging to trade or industry at present.
There is a further point. I quite frankly agree that we must have some limitation of these loans. I agree that we have, under various agreements, certain things which we have to do. but I ask whether, at the present time, it is really necessary

to have this Bill in its entirety. The Chancellor, in one bright spot near the end of his speech, appeared to be advocating elections to the Front Opposition Bench. How far he would go I do not really know, but all that I could gather, except for his little jokes and his artificial smile, was that there are some very gloomy facts at this stage. For weeks and months past the Chancellor has been boasting up and down the country of the strength of British credit. I believe that British credit today is very much stronger than some people think, and that it is very much stronger than it had any right to expect to be only 15 months after an appalling war. I say that British credit has stood up against the present Chancellor in a very remarkable way, but. if British credit has gone, as the Government try to make out, then, surely, it seems to be some hothouse plant that needs protection in every detail of our national life. This Bill is not merely a means of preventing dealings in British credit. This is a Bill which the Chancellor explains as putting down five great iron curtains round this country, preventing our people from developing and preventing them doing anything at all, on the grounds that we must, at the present time, preserve and strengthen British credit.
May I take up the five main points by which, in this Bill, we are going endlessly to restrict trade in the future? I am not saying that all of them are wrong, or that any of them are wrong, but I do question whether it is necessary to lay down that, in all these cases, it is absolutely essential to make the law of the land such that we have to do these things. We are told, from time to time, that there is such a heavy programme for this Session that it must be rushed through. This Bill will take very little time, quite obviously, and I wonder why we could not have had one of the other large-scale Bills today instead of this one.
The first thing that this Bill does is to put down this iron curtain to protect British credit from any outside attack, and it does that by preventing all dealings in gold and currency There is no great harm in that at the present time, but are we compelled, in the restriction of currency exports, to limit the amount that the ordinary private individual can take abroad with him at the present time? It is all very well for the Chan-


cellor to say that he will only do these things decently and easily, and for him to point out, in the tribute he paid to the banks, that these things have all been very well done in the past, but, of course, that is the case, because the banks, and the Bank of England, had had no great pressure put upon them. The system was already in existence under private enterprise and it has been handed over for the Chancellor to run. That was why the job was so well done in the past.
The second of these iron curtains is that we are not allowed, except with a permit from the Treasury, to do anything outside the sterling areas. I have been a little puzzled by the First Schedule to the Bill, and I would ask the Chancellor if he could really explain a few points to me. I have noticed that the right hon. Gentleman can answer questions if he wishes to do so. In the First Schedule, which deals with the sterling area, apparently, we can have exchange of currency with sterling with places like Iraq and Transjordania. Are we certain that in allowing exchanges of currency with either of these countries, there will be no leakage? It is true that we are told that the Chancellor will not allow it unless those countries follow similar rules. Are we sure that all these countries, such as Iceland, have precisely the same standards as we have in taking up and exporting sterling currency? I hope they have, but I should have thought that it was gravely doubtful in one or two cases. Is Eire coming in under the sterling balances as a Dominion? The Bill does not say so for certain, and I think we ought to know fairly soon whether Eire comes in or not. Perhaps the Chancellor will answer the points now, if I give way to the right hon. Gentleman, because it would seem to be a rather important point and we should know between now and the Committee stage. I hope I have not caught the Chancellor out in asking that he might give an answer to my question straight away. I am sorry if I have put him into an inconvenient position, because he is a very hard-working person.
There are other things which are being set up under the Bill. In Part III, the Chancellor is given power to set up another scheme for another collection of safeguards in all dealings in foreign cur-

rency. We have provisions dealing with our own currency, and various forms of control of exchange in all foreign currencies, all of which will be religiously controlled under this Bill. The Chancellor can go on from that, building up one after another of these controls, and I do not know whether it is really necessary, as, apparently, it is, that such minute details as these should be put into an Act of Parliament. Is it really so vital to the interests of British banking and British currency that we cannot even allow, under Clause 21 of the Bill, any ordinary person to send a postal order out of this country? Surely, it is not necessary to put that sort of thing into the Bill? I am only giving that as an illustration of my main point. In this Bill, we are laying down a whole series of regulations which are preventing the ordinary intercourse between ourselves and foreign people. Reference has been made to financial gambling. I do not want that kind of gambling, and I do not think that many of us think that it was good in the past or that it would be good in the future. I do not want limitless exchange of toreign currency at the present time, or limitless loans. I do not believe in that, just as I do not believe in a family or an individual gambling too much on dogs, or anything of that sort.

Mr. Kirkwood: The hon. Gentleman says he is in favour of gambling, but not too much of it.

Mr. Williams: I only used gambling as an illustration. I, personally, regard gambling as foolish. There are other people who think it is absolutely wicked and, again, there are some who think that there is no harm in it at all. I do not think that a man who is earning a decent wage and who puts half a crown on a horse is doing anything like as much harm to himself as if he were to wager 10s. or £1, or some sum well beyond what he could afford. I do not see why, simply because we want to stop the heavy gambling, we should stop every other form of gambling.

Mr. Speaker: An interruption has given the hon. Member an opportunity of speaking on something which has nothing whatever to do with the Bill.

Mr. Williams: I am very sorry, Mr. Speaker, but I was led away. I was


dealing with gambling in foreign exchange when I gave an illustration which applied to something else. I regret that I should have done so.

Mr. Gallacher: The hon. Gentleman is backing the wrong horse.

Mr. Williams: Because it is necessary to stop certain large movements of money from this country and certain transactions of which we do not approve, I do not think that it is really necessary to bring in all these scores of little regulations which the Chancellor thinks fit to bring in at the present time. I said at the beginning of my remarks that I was happy to support the Chancellor in this Bill, but the gloomy picture which he drew of foreign trade, which I do not believe is correct, drew me further and further away from it. I very much regret that, in the remarks which he has made during the course of this Debate, he has said nothing to assure me that it was needful at the present time to have all these regulations.
The Chancellor, as can be seen very clearly in the Memorandum at the end of the Bill, is so timid and so fearsome, and has so little trust in his own country, that he believes he must legislate, both in detail and on the larger points, in order to prevent any flight of capital from this country. That is a thing in which I do not believe; I do not think that it is likely, and I do not think that it is profitable. Quite frankly, I do not think that the Chancellor has done anything whatever to help British credit, trade or production; I think that by this Bill he has done the opposite. I only wish he had taken the same line and had adopted the same outlook as the President of the Board of Trade, when he showed that in the good will of the country we had a vast import and export trade.
The Chancellor paid a welcome and deserved tribute to the banking industry and those connected with it. I wish that he had shown greater trust in the ordinary people of the country. It is no good his saying that he will administer the Measure well, because he will not, necessarily, always be the Chancellor. In this Bill the Chancellor, rather than helping and encouraging the exports which we need to build up British finance is discouraging both industry and credit in this country deeply regret that we should have a

Chancellor who is taking that line at the present time; I hope that he will yet take another. Unless he does, I shall, if there is a Division, reluctantly be compelled to go into the Lobby and, in due course, I shall explain to the country why it was necessary for me to do so.

Mr. Speaker: Mr. Pickthorn.

7.17 p.m.

Mr. Callaghan: May I rise, Mr. Speaker, on a point of procedure? On the Order Paper, there is an Amendment to the Motion which declines to give a Second Reading to this Bill for reasons which it states. Six names are attached to the Amendment and the one at the top is that of the right hon. Member for West Bristol (Mr. Stanley), whom I have not seen here since 3.50 this afternoon. The second name is that of the right hon. Member for the City of London (Mr. Assheton). He made a long speech and, at the end, when you, Mr. Speaker, asked him whether he was moving the Amendment, he shook his head as if to indicate that he was not. The hon. Member for Bath (Mr. Pitman), who has also spoken, said, when I asked him what time limit should be set, that, in his view, we were wrong to concentrate on a time limit, and that the difference between the two sides was that we seemed to welcome the Bill and that they accepted it with regret. The hon. Member for Chippenham (Mr. Eccles), whose name also appears on the Order Paper, has been seen flitting in and out of the Chamber like a phantom, waving a pencil. I was hoping that the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) would move the Amendment when he got up. Is there any way of finding out the intention of the Opposition in this matter? Are they standing by their Amendment, or not? Ought we to reserve our speeches so that we can address our minds and remarks to the Amendment, or ought we to go straight ahead now and make our speeches in the light of the Amendment? I should be very glad to have your advice on this point, Mr. Speaker.

Mr. Assheton: I only intervene because the hon. Member is new to this House and has not, perhaps, had as much experience of it as some of us have had. The last speaker on this side of the House, before the end of the Debate, will move the Amendment on the Order Paper in the names of myself and other hon. Members.


The object of that is to give the greatest freedom to the Debate.

Mr. Callaghan: I have waited for four hours before raising this point. I would like your guidance, Mr. Speaker, as to whether we are free to discuss the terms of the Amendment when making our speeches?

Mr. Speaker: It is a general subject. The Amendment really rejects the Bill on the ground that there is no time limit, and so on. There is no question that that can be debated now.

Mr. S. Silverman: I listened with great interest to what the right hon. Gentleman the Member for the City of London (Mr. Assheton) has said, but am I not right in saying that the procedure of not moving the Amendment until the end, and then formally, is reserved for occasions when the Amendment is a formal one, such as when the Motion for rejection takes the form, "That the Bill be read this day six months," or something of that kind? Here we have a reasoned Amendment accepting the Bill in principle and raising points of objection to it. I would have thought that it would have been better if that Amendment had been moved earlier, so that we might address our arguments to it.

Mr. Speaker: The hon. Member has not observed that possibly, by directing attention to two points only, that Amendment might have limited the Debate. I was prepared to call the Amendment from the start, but it is a matter entirely for the Opposition. It may be more convenient for the House if the present discussion takes place before the Amendment is moved.

Mr. S. Silverman: I follow that, with respect, but on this occasion can it limit the Debate when the Amendment accepts the principle of the Bill, and welcomes and supports it, and when the only Debate which can be raised by the Amendment is about time and review?

Mr. Speaker: It may not limit the Debate, but it does change the emphasis of the Debate. It is a matter for the Opposition. It has nothing to do with me. I cannot say when the Amendment should be called. It is not within my powers.

7.22 p.m.

Mr. Pickthorn: If hon. Members opposite have finished

enjoying their joke and wasting time, perhaps I might begin to make my speech. Of course, I should have been perfectly willing to debate the Amendment or to move it, but it was considered—and I think rightly—that that would be taking rather an unfair advantage of people who wanted to discuss the Bill more widely By having the discussion wide we did not exclude those who wanted to limit themselves to the specific points in the Amendment, but, on the other hand, we allowed the discussion to range outside these points if it was thought proper. I can hear what the Chancellor is saying at the moment, and, no doubt, it is interesting and informative, but I have allowed him to speak once so that I could hear him, and it is difficult for me to address him, when I can hear him addressing his neighbour. It is like a three-cornered telephone conversation.
I think that all the speakers who have preceded me, with one or, perhaps, two exceptions, have been experts in this matter and those whom the House naturally expects to address it on questions of currency, coinage and so on. I am not in that class and I make no apology, not being in that class, for addressing the House, because I think it extremely important that matters of this sort should be so explained that, if I may without immodesty say, persons of my sort can understand it. If, having read the Bill as carefully as I can, and having listened, I think, to every one of the speeches today, I still fall in error about the meaning of the Bill, I am sorry. No doubt, it is partly due to my own lack of ability, but I think it is also prima facie evidence that more explanation is needed. After all, the business of this House is not to be a council of experts, but to be, in the main, a jury of ordinary men who shall be convinced by experts.
I should like to begin by referring to one or two of the points which the Chancellor mentioned in his speech. I thought he was less than just to his own standards when he talked about freedom and misery before the war and that sort of thing. There was a time when we were —I do not know what, quite—perhaps when we were web footed creatures paddling about in the mud, and then there was a long interval, and then there was the first Labour Government with an absolute majority. In


the interval, there was a good deal of liberty, no doubt a good deal of misery, but also in that interval there was a very great improvement in material standards. Indeed, to me the most surprising thing of all, when one thinks of the political imbecility—of which I do not assert that my party is less guilty than the party opposite, but I do not think it is more guilty—of the last 30 or 40 years, is that the standards did go up even then. I think, if I might say so without offence, that it is perfectly proper for some of the back bench Members opposite to talk that sort of stuff on a platform, but it is not for the Chancellor of the Exchequer to talk that sort of stuff to this House. Nor is it proper for him to explain to us the necessity for extreme and rigid regulation upon the basis of his promises of Treasury generosity. As has already been pointed out, and always is pointed out when it comes to that sort of argument, the right hon. Gentleman is neither permanent nor eternal. Neither are the right hon. Gentleman's advisers infallible. I get rather tired of the system of tribute paid which we have in this House. I myself would not pay any tributes, either to his intellectual candour or to his clarity this afternoon. I do not think either was noticeable. But especially should we beware of these tributes to persons in the Civil Service or in a similar capacity. They are capable of making mistakes too, and especially, however good they are, they are bound to take short views in many matters. In this matter, above all, it seems to me they are bound to take short views.
The sort of simple-minded contrast we had from below the Gangway between personal advantage, which, of course, hon. Members on this side always think of, and public advantage which, of course, hon. Members opposite always think of, is not really very easily carried out in practice, and it seems to me hardly doubtful that any Treasury official must always, in judging of such matters, think of what is going to be the effect on exchanges within the next year or two; and so, indeed, in a sense, he should, because if a Government makes a mistake about its long view the whole country pays an immense price. If the derided and despised speculator, of whom we have heard so much this afternoon, makes a mistake, not all the speci-

mens of the genus make the same mistake at the same moment. Therefore, they can take longish views. Treasury officials cannot take long views, and, therefore, I do not think that promise about their generosity from the right hon. Gentleman was of much use. Nor was it worthy of him to tell us that there were plenty of opportunities for review in Prayers against statutory instruments or directions or what not, and in the Opposition's ordinary opportunities in Committee of Supply. I suppose "review" may be a slightly ambiguous word, but one cannot propose Amendments to legislation on either of those occasions. It is quite plain —everybody knows it, and the right hon. Gentleman must know, better than anybody else here—that the Parliamentary machine has been overloaded, re-loaded and overloaded again, and even if it had been a reasonable opportunity as we had it in the old days when there was not very much legislation, when there was not a continuous state of strategic and diplomatic crisis and so on, yet now, in our present conditions, to refer us to those opportunities is not really worthy of our Debates, in my judgment.
I now wish to raise two points, one small and one large. The small point is, I think, rather important. I apologise if I may be, to some extent, barking up the wrong tree, but I think I understood the Bill, so far as my point went. The small point is about what is called cultural cooperation and all that—collections of initials such as C.E.M.A. and U.N.E.S.C.O. I may be prejudiced in the matter—I do not like being taxed— but it seems slightly absurd that I should be taxed in order that the Minister of Education, or the Parliamentary Secretary, some such person should go and have a jolly holiday in Paris talking with other Leftish chaps about intellectual co-operation in the future, while I am not allowed to buy one book or one picture from Paris, as far as I can understand. If only the right hon. Gentleman would leave me alone, I am intellectual cooperation; I do not say I am all of it, but I am some of it. If only he would leave a lot of individual people alone, who could buy books and pictures from Paris, who could go to Paris occasionally and see their friends who are in positions in which they are directing culture and so forth—such as publishers, writers, painters and politicians—there would be


a great deal more intellectual cooperation than under the present system.
I should like to know whether there can be any kind of assurance, for amendment or otherwise, for some sort of general relaxation of the following three specific sorts. First of all, to enable individuals to buy books directly from foreign countries. Apart from anything else, that would directly save currency; because if I buy books from Paris I buy them cheaply from publishers or booksellers, but if I can buy them only through licensed booksellers in England, more currency has to go out of the country in order to meet the francs he spends than would otherwise be the case. There are indirect advantages in what I am proposing. This country has never exported anything except coal and skill. Of all the ways of exporting skill, the one that pays best—the one in which we risk the smallest amount of currency at the beginning to get the largest amount back later on—is when we buy a tree in, say, Labrador, and send it out to a foreign country in the shape of books. If we are to be the natural and central market in the English speaking world for books, everything possible ought to be done to encourage English people to import books from France, particularly, and from every other country where books are printed; otherwise, even on the direct short-term view, we shall lose a lot of currency which we need not lose.
Secondly, pictures. Could not something be done to allow individuals to buy pictures? Not even dealers can buy pictures now, I believe, except in very special cases. I believe it is very difficult for dealers to get permits: for an individual it is quite impossible. As an individual I am not likely to spend more than £30 or £40 on a picture, and even that on but rare occasions. Would all the individuals likely to buy pictures really export much sterling? What happens at present is that we spend money on boosting two sorts of painters and authors. In the main, we boost those who are good but are already perfectly well known to be good. Nothing could be more ridiculous than spending public resources on boosting Picasso; whatever may be thought of Picasso, he is there and is known to be there; or, alternatively, when we are not wasting resources on that sort of thing we are wasting them upon some second-rate

painter or author as a rule. Here again, I do not suggest I would be a better judge than C.E.M.A. or U.N.E.S.C.O., or any of those organisations. All I say is that I and 20,000 other people would not all make the same wrong bet at the same moment; it would not be possible. May I not save the money I should be allowed to spend on American moving pictures and spend it on a real picture from Paris? I really think that is not unreasonable. If we are to have this extreme control of currency and exchange, some way must be found round that sort of thing or else civilisation is up—it will be finished. Either such enormous controls must not be asked for, or some way of giving liberties must be found—and not merely individual specific liberties, obtained as the result of long correspondence or ministerial conversation.
In this particular connection, of pictures and dealers, cannot some means be found for allowing the London dealers to have some sort of revolving credit? At present, I think it would be generally agreed—except by a few Paris dealers— that the London dealers are about the best for their skill and reputation, and honesty combined. That being so, it does seem rather absurd that they should not be able to use those assets in order to bring dollars to this country merely because they cannot go abroad to buy pictures, whereas American dealers and agents can. I would ask the Chancellor to consider whether, even from the financial point of view, a considerable gain might not be had in this matter of books and pictures; books imported by both dealers and individuals, and, in the case of pictures, by dealers. I do ask him to consider whether also, thinking of keeping civilisation together and all that, there is not very great gain to be sought here. I am perfectly certain that if the Chancellor cannot see a way of meeting those points in this Bill, then this Bill certainly ought not to have been introduced as a permanency, but ought to have been an emergency Measure.
I now wish to come to my major point, and I will be as quick about it as I can I think it only fair that I should put it forward. Should we not have had our economic inquest before accepting this Bill as a permanency? The Bill is not urgent, because the powers are there already under Statutory instruments. It is no use hon.
Gentlemen opposite taunting us about the date at which we expect to be able to do without this control. Of course, nobody can put a date to it. Equally, any party which has risen to power as the party opposite has upon two main principles— (a) the primacy of the economic over the political and (b) internationalism—any party that has risen on those two stepping stones must desire exchange restrictions to be reduced to zero as soon as possible. If not, it makes nonsense of the whole of its own basis, and one of the few safe predictions is that nonsense never lasts very long as a system of power. And on this my major and last point, ought we not to be told more about the effect upon the exchange of what has been happening hitherto? I ask only one specific question, though I have half a dozen I could ask. Of the exports which we have been told have been doing so well during the last 12 months—especially during the last six months—can we be told what proportion are, so to speak, hard exports, exports which have gone we know where, to consignees of whom we know, who are going to pay on a date which we know, in a currency which we know we shall want at that date? Unless we can, from time to time, have those proportions, it seems to me quite impossible for us to know whether the export drive is meaning anything at all, and absolutely impossible for us to guess whether or not the time is approaching when perhaps exchange restrictions might be, to some small extent, relaxed.

7.38 p.m.

Mr. Callaghan: Now and again the hon. Gentleman the senior Burgess for Cambridge University (Mr. Pickthorn) does lift a little corner of his rigid intellectual exterior and show us that he has a heart underneath. He has done so this evening. I do not blame him for not sharing views in common with my own, for which no doubt he is as grateful as I am. At least we have this in common, that, I, like him, do not claim to be an expert on this Bill. I did try to read it, but I did not get very far. I read the Explanatory Memorandum and, if I may say so—although the senior Burgess for Cambridge University does not like encomiums being paid—I thought it was an admirable piece of work. Even I could understand it—and I think most people who applied their minds to it would be

able to understand the basic purpose of that Memorandum. I certainly do not understand the Bill in the same way that the posse of professional practitioners sitting opposite understand it. I speak with due deference in front of them.
There are, however, certain comments which I would like to make, one of which has been very prominently in my mind during the long discussion that has gone on since half-past three. It is this. Surely, this Bill is constructed out of our experiences, not only during the war, but during the years preceding the war. I should have thought the post-1931 history had demonstrated that it was quite impossible for us to continue without a Measure of this sort. This is not really related to the difficulties that we know in the postwar situation. It is related to the history of the pre-1939 era. After I had heard the speech of the right hon. Gentleman the Member for the City of London (Mr. Assheton) I went out and looked up the history of exchange controls. I turned up a book written in 1932, and I found that as long ago as 1932, there were 24 nations that had complete and direct control over foreign exchange dealings. The only point I want to make—and it is, surely, a point worth making—is simply that this Measure is related, not only to wartime experience, or to difficulties we expect to arise in the transitional period, but, also, to the economic situation which confronted the world before the war, which made the policy of free exchanges null and void after 1931. That is the first point.
I should have thought that what emerged in the thirties made a Bill of this sort desirable—the large-scale movements of capital—I do not care whether you call them "hot money" or not— which went from country to country with extraordinary rapidity, and without regard to the economic consequences. I remember many years ago reading an article—I think by one of the former editors of "The Economist"—in which there was used a metaphor which has remained in my mind. The writer referred to these large-scale movements of capital over the frontiers of nations as being
the hurtling of large lumps of metal, uncontrolled. from side to side of a rolling ship.
Was that not the position in the 'thirties? I should have thought that the flight of


the pound to the dollar in 1931 represented such a position. I should have thought that the lump of metal hurtled back again in 1933, when there was the flight from the dollar back to the pound because of the uncertain economic conditions in the United States, which, for a time, paralysed the whole financial machinery of this country. If those facts are established, I come back to my point: there surely is a case for this Bill.

Mr. John Foster: May I ask the hon. Member whether he is arguing that exchange control should have been established in 1931, or previous to 1939, in this country?

Mr. Callaghan: I am, of course, in favour of this Bill, and I propose to vote for it.

Mr. Foster: What I am asking is whether the hon. Member thinks exchange control should have been established after 1931 and before 1939, in this country.

Mr. Callaghan: I speak, as I said at the outset of my speech, not as an authority on this subject; but, as far as I understand this matter, I should most certainly have been in favour of the restriction of the egress of capital from this country between 1931 and 1939. I speak subject to correction by the hon. Member for Northwich (Mr. J. Foster), but I thought that was the position. I thought that before 1939, in this country we did control foreign borrowing, and we were able, surely, in this country to prevent the exodus of capital on foreign issues from the City of London? I thought that was the position.
The main point I want to come to is the question of timing. We have had a singular exhibition from hon. Members opposite. The hon. Member for Bath (Mr. Pitman), who has put his name to the Amendment, said he did not think time a major factor. I put it to him specifically. He did not think that the real issue between us was the time limit. The real difference, he said, was that Members on the other side regretted the introduction of the Bill and that we welcomed it. I do not know why he put his name to the Amendment if that was the way he felt about it. We have continuously pressed hon. Members opposite to give us some indication of what they

have in mind when they say the Bill should contain a limitation in time. Presumably, it means something. They must have some time in their minds. When we pursued the hon. Member for Bath he said that, perhaps, in 10 years the occasion might arise, but he would not put it any more definitely than that. Unless we hear something startling from the hon. Member for Chippenham (Mr. David Eccles) in the way of enunciating what time limit should be imposed, and indicating a little more precisely what the time limit should be, I think that the putting down of this Amendment will really have been a rather appalling exhibition.
The Bill does not give us an opportunity for review, says the Amendment. We have had no arguments today at all addressed to that. I was hoping to hear arguments addressed to both those matters before I spoke, because then we should have known what to answer. As it is, we have not that advantage, and we must make the best of what we can draw out of the Amendment as it stands. As I understand it, Regulations will be made from time to time which will give this House the opportunity to review the working of this Bill. I cannot assume that hon. Members opposite. who are so vigilant in these matters, are going to allow those opportunities for review to pass by. I cannot think that, in circumstances like that, they can really be proposing to divide this House on two such small issues, about which we have heard practically nothing, and for which no real reasons have been adduced.
In conclusion, I want to spend two minutes dealing with one important point, among many others, which seems to me to arise out of this Bill. If we are—as we are—going to preserve full employment in this country, then any American slump is going to make it more difficult for us to maintain our exchanges. I put it to the House, that it would be impossible for us to maintain a system of full employment in this country or to maintain our exchange rates. I aver, without fear of contradiction, that an American slump will make it exceedingly difficult for us to carry out our policy of full employment as we propose to do it. What I should like to ask the Minister who is to reply to this Debate is this: What protections have they got in this Bill—or outside the Bill —against an American slump? Because I


believe that to be the biggest question mark that overhangs this Debate, and that overhangs the whole of our economic framework.
I do not want to cast jibes at hon. Members opposite in this connection, but it is, surely, significant that the country which has thrown. off controls of all sorts as fast as it can, wage controls and price controls, is now confronted by titanic and mammoth labour troubles which make our little disputes here seem like Saturday afternoon cricket matches. There is a great country palpitating and pulsating in the midst of these tremendous troubles between labour and capital. Why? There are many reasons, but there is one, in particular, and that is, clearly, the removal of all controls on prices and wages. That must be quite clear, I think, even to the most prejudiced observer on either side. If this convulsion, through which the United States are passing, is going to lead to a vicious downward spiral, with its consequential effect on American exports, with its consequential effect upon the ability of the United States to affect our own imports, what is our policy to be in those circumstances? What protection. what barriers, are being raised to put a ring fence around the United States in circumstances like those? That is what will be needed.
There are one or two suggestions I would make in that connection. The first is that we ought to get together with all other countries which are committed to a policy of promoting full employment in order to see how, between us, we can unite in our own defence if a slump of this sort should come about. I think it might be possible to coordinate the economic policies of the full employment countries. Another suggestion I would make is that we ought to get together with the primary producing countries which would be most immediately affected by an American slump. One has only to look at the list of countries from which America imports raw materials to see how countries like Malaya and the rest of the primary producers would be affected. How can we get together with them to promote arrangements which would enable their selling power to be maintained in the circumstances in which we may be placed by a catastrophic American slump? If we can maintain the purchasing power and the

selling ability of those primary producing countries, it may be possible to obviate some of the worst effects of such a slump. I hope so, at any rate I think it is well worth the effort and I think we ought to pay attention to the prospect that will face us if we do run into such a situation.
I do not know whether the United States have yet fully realised just what a vortex they are in the present world situation. They pull everybody in; we are all circulating round, and gradually being drawn into, that great market, and the responsibility resting on the Americans for pursuing wise and statesmanlike policies is probably greater than that which rests upon the shoulders of any other country, because of their influence for good or for ill in the world today, as they are such a large buying and selling country I only hope that they will follow international policies which will enable us to get round the corner from the slump which my hon. Friend the Secretary of Overseas Trade referred to, and about which he has been misrepresented. What he said in the Debate we had on industry two or three weeks ago was that we might be faced with a slump like that of 1921. Will anybody deny that we may be faced with such a slump? He went on to say—and this is where those who have quoted him have forgotten what he said—that our policy of controls, our central plan, and our increased economic knowledge would make it possible for us to ride out such a situation if it did arise. It is important that we should balance ourselves between pessimism and optimism on an occasion of this sort. My hon. Friend the Secretary for Overseas Trade was not being pessimistic; he was being optimistic in a restrained way. He said that if the situation did arise we should be able to get over it. I echo his thoughts. I think this Exchange Bill is just another small weapon in our economic armoury which will enable us to face the storms which will undoubtedly burst pretty soon in the international economic field, and I shall go into the Lobby to vote for it with a good heart.

7.54 p.m.

Mr. Nigel Birch: I do not know how the hon. Member for South Cardiff (Mr. Callaghan) voted last Monday week, but it struck me that he was going very near to advocating a Socialist foreign policy, which I believe is not in favour with those on his Front Bench. On principle, we on this side of the House should


be glad to have a Bill on this subject, rather than that everything should be done by order and regulation, but when you get down through the verbiage of this long Bill, you see that it is in effect purely an enabling Bill, which allows the Treasury to do anything that it has a fancy for. Every single Clause is qualified by the statement, "as the Treasury may direct."
We agree of course that at this particular moment control is necessary, but I do not think it is necessary to impose it in this particular way, because this is really the totalitarian method of order and regulation. With the exception of the hon. Member for South Cardiff, practically every hon. Member who has spoken on the other side has said a powerful piece about the evils of speculation, and has said that everybody on this side who opposes the Bill is trying to support speculators. Even the hon. Member for South Nottingham (Mr. N. Smith), who has just left the Chamber, said this and he has frequently boasted in this House about his great prowess as a speculator. I would like to remind hon. Members opposite that in fact the very first thing that has been done by all totalitarian Governments, particularly in Germany and Russia, has been to control foreign exchanges by order and regulation. Though it may be temporarily necessary to pursue Schachtian ends, it is not necessary to do so by Schachtian means. I have no doubt if the right hon. Gentleman was here he would remind me that Dr. Schacht was acquitted at Nuremberg, but I do not think he got off without a stain on his character.
I would like to say a word or two about the White Paper which was issued at the same time as this Bill. I do not altogether agree with my right hon. Friend the Member for the City of London (Mr. Assheton). I do not like the White Paper; I think it contains a number of fallacies. The main fallacy comes in the first sentence, which reads:
The object of exchange control is to enable us to pay our way abroad.
We cannot pay our way abroad by exchange control; it is a nonsensical sentence. A private person cannot pay his way by locking up his purse; he pays his way by getting an income, and the only way we can pay our way is by selling abroad goods people want at prices they are prepared to pay. Simply to say that

we can do it by exchange control is nonsense, and that is what the White Paper says. It goes on:
To do this"—
that is, to pay our way abroad—
we must conserve and allocate our exchange resources and overseas income so that we can be sure of being able to pay for essential food. …
and so on. Exchange control cannot ensure these things; this is a piece of absolute nonsense. It is the basic deception which has been preached by hon. Gentlemen opposite that we can ensure our position in the world by these low-level plans and controls, and that money will flow into this country without anyone taking any risk or making any particular effort or showing any particular skill. I do not suppose that any banker is in the least displeased by this Bill. There is every reason to suppose that they are all delighted, if they get on with the Treasury —and I do not suppose they will have any difficulty in doing that—

Mr. Harold Davies: rose—

Mr. Birch: No, I have only a short time, and I cannot give way. The bankers are assured of virtually no competition, because the one thing that will happen is that no new entrants will be allowed in under Schedule 6. The matter is entirely in the hands of the Treasury; there will be no need for skill, there will be no risk at all, and they will be enabled to earn larger commissions than before the war which they are not even allowed to cut by dealing between themselves. I do not see why they should complain on that basis. Controls, of course, suit a great many people, particularly people in a big way of business, extremely well, but to pretend that the salvation of the country lies in those controls is to preach dangerous nonsense, because by having accepted the American loan we have committed ourselves for good or for ill to a competitive, open, Liberal economy. We have committed ourselves to that, and the game must be played according to the rules. You cannot win it by sitting down and doing what most people in this country are doing, playing patience till the hearse comes. It will not work. That is what hon. Members opposite are encouraging everyone in this country to do, by ensuring no risks, no competition, and, therefore no need for skill.
I fully agree with the right hon. Gentleman, and with one part of the White Paper, that our short-term position is one of extreme danger. Of course, that is not consistent with what the White Paper says later on about sterling being a "stable and reliable currency." The White Paper goes on to talk about the possibilities of speculative attacks on sterling. I think that this is an understatement, because there is, in fact, a positive attack on sterling now going on, an attack which is being led by the Government. There are two main ways that sterling is being attacked by the Government, first, by their Budgetary and monetary policy, and secondly, by their German policy. By their monetary and Budgetary policy, they are stimulating the cost inflation now going on at an accelerating rate, which will be our ruin if it is allowed to continue. They are doing this by having inflationary Budgets during an inflationary period. This, perhaps for the last time in our lives, is the time when we ought to be exercising really active economy, but it is not being done. The next damaging thing to our position is the present policy of forcing down the long-term rate of interest. I am fully in agreement that it is the function of the State to control the rate of interest, which, in fact, has been done since 1931. I am fully in agreement that the short-term rate of interest should be kept down, and I am also in agreement that we should not allow the long-term interest to rise, but to cut down now the long-term interest rate by one-half per cent., is the most foolish and dangerous thing we can do.
The Chancellor told us that "The Banker" approved of what he is doing; he should look at "The Banker" on his monetary policy. What he is doing is to create an enormous inflationary potential which will work out very, much to the damage of this country. He is trumping all the aces he might play if and when the slump predicted by the Secretary for Overseas Trade comes off. The second way the Government are attacking sterling is by the folly and, I say deliberately, the wickedness of their German policy. This will cause a big strain on our foreign exchange, which we shall have to meet during the next five years or so. The position is one of great difficulty but it is being made infinitely worse by the destruction of factories, the refusal to cut

coal exports until the German economy has run down to nothing at all, and by bad administration. We see in the papers that an agreement is being made with America which in dollars will cost us a very large sum, and represents a considerable percentage of the American Loan. The sum is far greater than it need have been if we had acted wisely and it may well be fatal.
Hon. Members opposite disagree on many things, and they are, in fact, becoming a party of cave dwellers. But there is one thing they are all agreed upon, and that is that they are without sin, either original or acquired, and that therefore, whatever happens, it is not going to be their fault. Now that the Bank of England is nationalised, it cannot be the fault of the Bank of England —we can see it coming—everything is going to be the fault of America. What is the good of gloating over the troubles which may arise as a result of American slumps? What about the troubles to America as a result of disasters here? If we do not act rightly, not only shall we ruin ourselves, but we shall spoil our international relations. What we are doing is deliberately to make a situation already difficult more difficult, and the consequences of our failure will be grave. I should like the Solicitor-General, when he replies, to make it clear that it is only by our own efforts than we can win through. We cannot win through by exchange controls. They have little or nothing to do with it. We can only win through by a correct budgetary and monetary policy, by reversing our German policy and above all, by telling the people the truth—how long the American loan will last, and what happens when it comes to an end. When hon. Gentlemen opposite have done that, they are entitled to call for greater effort, and when they tell the truth and treat the people of this country as men, then they can expect them to behave as men.

8.7 p.m.

Mr. Gallacher: As I sit listening to this Debate, I get more and more astounded at the attitude of Members on the other side. I get the feeling that they are so dull-witted, and live so much in the past with some pathetic idea that that was must continue, that they are incapable of understanding that this Bill is in their own interest. As a matter


of fact, this Bill might be called "The Protection of Foolish Capitalists Bill." There was a time, and it is now a long time ago, when they could make investments abroad and lie back, year by year, drawing interest, and in some cases a very high interest indeed, without having to worry. That was as things were: now things are changed. Not long ago the right hon. Gentleman the Member for West Bristol (Mr. Stanley) was pleading with the Chancellor of the Exchequer to do something for the people who had invested capital in Japan—it had all gone, and there was nothing coming back. At the present time we are faced with the fact that the Government have to intervene, and try to do something to get compensation for those who invested capital in Czechoslovakia, now that the industries have been taken over. The same thing is happening in Rumania. The Government should do nothing for these investors.
We are living in a different world today from the world of 1914. The Chancellor of the Exchequer has been brought up in a bad school. He has got a somewhat unhealthy dislike of the Communists, but he has got a good healthy dislike of the capitalists. His healthy dislike of the capitalists, however, is not as strong as his unhealthy dislike of the Communists. He does not like the idea of allowing capitalists to invest their money abroad, because he knows that sooner or later, and in many cases sooner, it will come under control of the Communists. We can only pay our way abroad by the utmost production of useful commodities and by services.
It used to be the case that much of our payments abroad was provided by the services given by sea transport. Now there is a new method of transport, by air. How much service will be given by air transport in relation to our payments abroad? How are we to help to pay our way when there are over 70,000 unemployed in Scotland? What contribution are they making? When we have capital to invest, and we want to meet our commitments - abroad, why is it that that capital cannot be invested in Scotland in, for instance, an aircraft factory? Surely, we can have an extensive development of air transport and air services which would be invaluable to us from the point of view of paying our way abroad.
I suggest to the Chancellor that in his desire that we should pay our way abroad

he should realise that one of the finest ways of doing this is to make air transport what sea transport used to be to this country. He should use whatever power he has to get this great service developed, and ensure that Scotland, which played such a tremendous part in building up our credit in sea transport, will get an opportunity of expressing herself in the development of this new mode of transport, this new service, which would be of such value to us in meeting our obligations abroad. I make that appeal to the right hon. Gentleman, and I suggest to the Members on the other side of the House that if they want to protect their own friends from their own folly they should support, and not oppose, this Bill.

8.13 p.m.

Lieut.-Commander Gurney Braithwaite: Having imposed upon myself a self-denying ordinance in order to assist others to take part in the Debate, I hope the hon. Gentleman the Member for West Fife (Mr. Gallacher) will not think me discourteous if I do not accept his invitation to follow the interesting speech which he has just made, but, instead, confine myself to some observations on the Bill which is before the House. The Chancellor, in moving the Second Reading of this Measure, confined himself, properly, to a broad survey of its provisions, and told us that we should become technical later on. I am sure that the powers of exposition of the Solicitor-General will be given full scope when we come to discuss the details of the Bill, during the long voyage through its 44 Clauses and six Schedules, on the Committee stage.
This Bill reminds me in almost every aspect of another over which we laboured for a long time last Session, the Measure now known as the Borrowing (Control of Guarantees) Act. There is much of the same procedure about it: Defence regulations to be turned into permanent legislation. The word "flexibility" will, at least, strike a cord in the memory of Members opposite. It was introduced over and over again as the reason for resistance to our Amendments. Now that Bill is on the Statute Book as one of the achievements of the present Government. Under it, greyhound tracks flourish while industries requiring capital stand in the queue or are turned down, a very good example of Socialist planning. I am surprised at


Lieut.-Commander Braithwaite.] the enthusiasm of Members opposite for this Measure, and particularly at the hon. Member for West Fife, because if he reads the Clauses carefully he will find that over and over again they begin with the sinister formula:
Except with the permission of the Treasury.
How often have we heard Members opposite complain of the dead hand of the Treasury in this and that matter? Only last night, the question of a marriage allowance for the young soldier was raised, when it was said that the Treasury were the people who stand in the way of a remedy, that the Treasury have been pleaded with over and over again in the matter. Yet here we have another Measure giving more and more power to the Treasury, without whom no action can be taken.
We are not to be allowed to take our money out of the country, even for the purpose of paying visits to other lands. That is a striking provision for a Government that pride themselves on their international outlook. How can better feelings come about between the nations unless there are opportunities for people to visit other countries, without going through all the network of control and frustration? It is a little odd that this barrier should be put on our tourist traffic.

Mr. Proctor: rose—

Lieut.-Commander Braithwaite: I hope the hon. Gentleman will not think me discourteous, but I cannot give way because I have made a promise to the Chair to keep to the timetable. I would have given way otherwise. The Chancellor of the Exchequer said today that for seven years the machinery of this Bill had worked admirably. He said it had worked admirably under Lord Catto. That is astonishing. After all, there was another Governor of the Bank of England, who was in office for a very long time, who said that the wartime exchange control worked smoothly and well during this long seven years. Plenty of things have worked well during that time.' Conscription did, but I have heard many complaints about that in recent days. Regulation 18B worked admirably in keeping Sir Oswald Mosley out of the way while the war was being

fought. Regulation 1AA may not have worked smoothly, but at least it worked well, and with the support of the House. Surely, it is an astonishing argument to say that because a restriction worked well during those seven years it should be permanently embodied in our legislation.
I should have thought that the Bill was entirely unnecessary at the present time. The Government have power for five years, from 1945, through the Supplies and Services Act, to continue this machinery. I should have thought that there was plenty of time to look at this matter again when that Act had run out, instead of having permanent legislation at the moment. I would like to put a simple question to the Solicitor-General. When this Bill is on the Statute Book to whom can Questions be addressed if something goes wrong? We in this House ought to be in a position to ask Questions on the matter. Can we ask the Chancellor of the Exchequer, or will he ride off on the Bank of England, which is protected from that sort of thing? Will there be full opportunity for Questions to be put in the House? This is of vital importance to the House of Commons. I hope the hon. and learned Gentleman will not rest on the one argument that the war machinery has functioned without criticism or friction. I thought that the speech of the Chancellor was revealing and alarming, as showing the Government's forecast of our future financial situation. The right hon. Gentleman used some remarkable, even sinister, phrases, which I took down as well as I could. He said, "This Bill is necessary for our national financial defence." Defence against what? Defence against the effects of a Socialist Government outside?

Mr. Gallacher: Against the robber capitalists.

Lieut.-Commander Braithwaite: The hon. Gentleman is always looking nervously over his shoulder. How unsuitable it is that he should place himself on those benches in this Parliament. His glance goes to the right and to the left. The Chancellor also said, "We know not what the future may hold," and he shook a warning finger. He said, "This Bill is one of the conditions of national safety." My hon. Friend the Member for Bath (Mr. Pitman), speaking earlier today, made an observation which I thought was pro-


foundly true. He said that there is no such thing as hot money, with which this Bill claims to deal. A hot situation, yes, but not hot money. I will go a little further, and say that hot situations which cause the flight of capital are almost inevitably a result of a weak, vacillating, or incompetent Government. The flight from the franc was caused by an unstable French political situation when no stable Government could be found. The flight from the mark immediately following the last war was the result of the failure of Germany to set up a stable Government; and, of course, the flight from Socialism in 1931 is the best example which we can put forward here.
Hon. Members opposite say that the object of this Bill is to provide for the storm which is now pressing upon us. It is, in fact, an attempt to dam the reservoir of British credit. Hon. Members opposite may smile when I make that observation. but I do not ask them to believe me, I ask them to believe a very intelligent Minister in their own administration, the President of the Board of Trade, who assured the country, not so very long ago, that the advent of a majority Socialist Government would inevitably be followed by a first class financial crisis. This Bill will undoubtedly make its way through this House and another place on to the Statute Book, but it will prove a feeble defence against the storm which is about to come upon us.

8.21 p.m.

Mr. Scholefield Allen: The hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) referred to a figure in our Socialist Party for whom we have the highest respect—the President of the Board of Trade. We on these benches feared that when we came into office the patriotic citizens who owned so much of this country's wealth would immediately remove their wealth to Paris, if it were safe there, or to New York, if it were safe there. My right hon. and learned Friend the President of the Board of Trade, in a contribution which he made to the "Problems of a Socialist Government" rightly dealt with that point, as the hon. and gallant Member for Holderness correctly says, and he was called a dictator by hon. Gentlemen opposite for saying that if the people of this country democratically elected a Government with a mandate for Socialism they should take

immediate steps to see it was not frustrated as the Popular Front Government of M. Leon Blum was frustrated by the flight of capital from Paris to this country. That is the situation which we feared when we thought we should come into office. When we came into office, with the burden of war on our shoulders, the one bright spot was that we had the essential financial controls in our hands. If we stand for Socialism it is essential, in my opinion, that we should hold these essential financial controls.
What have we heard from the benches opposite today? Have they faced the very real problem that this country of ours is short of foreign exchange, that it needs every ounce of British capital upon which it can lay its hands? That is the essential point, but we have had speech after speech from the benches opposite complaining about little inroads on freedom to buy pictures in Paris. I have listened to practically every speech made in this Debate, and I have endeavoured to find out what the Opposition want to do. Do they want us to withdraw this Bill, or do they suggest that it should be for a period of five years or ten years? All that they have done is to make an attack upon controls. We know why that is done. Each one of them knows in his heart of hearts that we must have this Bill for five years or ten years at the very least, but they make speeches about the freedom to do this and that, and ridicule this Bill on the grounds that they cannot buy a picture or do a little bit of travel. What the capitalist Press will do tomorrow will be not to give the solid arguments on the Bill and its passage through this House, but take as headlines the trivial arguments about the freedom of the citizen, which come- from the other side.
The hon. Member for Torquay (Mr. C. Williams) talked for quite a long time, and my hon. Friends endeavoured to understand what he was saying. It was with great difficulty that I understood any of his points, except the one under the First Schedule in which he pointed out that one of the free countries apparently was Transjordan. He asked the Chancellor of the Exchequer whether he was quite sure that Transjordan should be included in the First Schedule. I think that he was frightened of a body of international financiers working from Transjordan, or perhaps from the Faroe Islands.
This Bill, in my view, as rightly said by another hon. Member on these benches today, is a very simple Measure. I do not know anything about a wireless set, so I take it into a shop, and say, "Please mend this wireless set." I do not know how it is done. What my constituents say is, "Please, Mr. Chancellor, defend our right to live and our right to work. Let us see that the financial barons do not take the necessary capital and necessary foreign exchange in order to feather their own nests, when work must be provided in this country by the capital that rests here now, and imports must be paid for by foreign exchange which the Chancellor retains in his hands." That is quite a simple matter. Of course, the repair of a wireless set is a complicated business, and the means of effecting these two simple duties of the Chancellor are also very complicated.
Probably not many hon. Members will follow each detail of the various Clauses of this Bill, but the simple purpose of it is to protect our foreign exchange and to prevent hon. Gentlemen opposite, and those whom they represent, from moving large portions of capital outside this country because, as has been so well said from these benches tonight, and I do not apologise for repeating it: Capital knows no flag; it will go where the interest is highest. I hope that this Measure is not for ten, 15 or 20 years. We want a permanent Measure to build into the permanent working structure which we are determined to make for the benefit of the people of this country. I think that the right hon. Member for the City of London (Mr. Assheton) said that he believed that the Chancellor reminded him of "The Doctor's Dilemma." It reminds us on these benches of "The Importance of being Earnest," in the furtherance of our Socialist world.

8.30 p.m.

Mr. David Eccles: I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof:
while recognising the necessity for a measure of Exchange Control under present circumstances, this House declines to give a Second Reading to a Bill which contains neither limitation of time nor opportunity for review.

The hon. and learned Member for Crewe (Mr. Scholefield Allen) has made a speech based upon the idea that our dislike of this Bill is due to our desire, as capitalists and representatives of capitalists, to send money abroad. I can only ask the hon. and learned Member to wait until the end of my speech to see whether I measure up to that insulting description. If he remembers the war, he will know that We were all in it together, and if he knows anything about capital movements before the war, he will know that it was not British money that left this country and was called "hot money," but temporary money that had been put here; and he will know that it is not fair to accuse the rich men of this country of having sent their money abroad. However, since he will not believe that, I ask him to hear my speech, and to judge me by it.
Every time I hear the Chancellor of the Exchequer make one of his clear, dogmatic statements, such as he made this afternoon in moving the Second Reading of this Bill, I fear for the finances of this country. A classical education has taught me that when men are sure they cannot be wrong, and when they have no doubt about the consequences of their actions, then the gods have touched them and are preparing them and their friends for calamity and woe. How can the Chancellor, with the gusto of a postwar child eating bananas, welcome a Bill which declares to be permanent the present weakness in sterling? He showed the same satisfaction over the withdrawal of silver from the coinage. Now he asks hon. Members on this side to approve this second instalment of poverty—I use his own words—as an inevitable consolidating and conservative measure. We cannot do that. We have a deeper faith in the vitality of our country. We know that the health of sterling can recover, and we shall not rest until the pound is again freely exchangeable with the dollar.
I can express the attitude of my party to this Bill by an obvious analogy. Supposing a boy is sick and is put to bed, and the next day the doctor says he has scarlet fever, then his parents must send him to an isolation hospital. Sending the boy away can be described, in the Chancellor's words, as an inevitable consolidating and conservative measure, but it is not a measure to be welcomed; in fact, it is


nothing but a necessary and very temporary evil. My hon. and right hon. Friends have put down an Amendment because we know that sterling is sick at present, but we decline to incarcerate it for ever under the care and control of the Chancellor and his successors. When we reach the Committee stage we shall put down an Amendment putting a time limit to the life of the Bill. We have been challenged to say what that time limit is. In my judgment, the minimum time limit is the same as that of the Supplies and Services (Transitional Powers) Act, because under that Act the Chancellor has the power asked for under this Bill; but we cannot say exactly what the time limit is until we have had some answers from the Solicitor-General about the size of the dollar deficiency. That is the factor which we must know in order to be sure when it is reasonable that this Measure which ought never to be permanent, can come to an end. A little later I will put some questions to the Solicitor-General.
In listening to the speeches that have been made from this side of the House— I think anyone who prophesied, as some people did, that we should have a short and dull Debate has been proved wrong— hon. Members will have gathered that there are two principal arguments for our Amendment. First of all, such comprehensive powers to control all foreign exchange transactions as are given under this Bill ought never to be part of the permanent law of a civilised country, and, secondly, prudent management of our domestic economy would enable, I do not say all, but the great bulk of these powers to be withdrawn within a reasonable number of years. My hon. Friends on this side of the House have referred to the restriction upon the mobility of commerce and persons which is imposed when every man has to go, cap in hand, to get an official permit if he is to spend any money outside the scheduled territories.
I want to support their argument by reminding the House of this. When the Foreign Secretary told us that his aim was to abolish all passports we applauded him. When he said he looked forward to the day when any man, who wanted to go abroad, had only to go to Victoria and buy a ticket, we applauded him. That was the voice of civilisation. Now the Chancellor of the Exchequer comes along

with quite a different tune on his lips. He introduces this afternoon, with evident satisfaction, a Bill which is going to make permanent a kind of passport upon persons and goods, not in the difficult years ahead but for ever more. That is the voice of the Dark Ages.
I ask the House, Is it not likely that many of the roughnesses and blind spots which now mar our relations with Russia would disappear if British and Soviet citizens could move freely in and out of each other's territories and spend their money upon the products of each other's economy? What prevents the ordinary Russian from coming here and buying here? The policy of the ring fence around the U.S.S.R. What is the strongest element in that ring fence? The rigid system of exchange control which completely ties the citizen to the currency of the area where he lives. If we are to make the United Nations organisation a success, ought we not to hesitate in constructing a permanent obstacle across one of the chief channels of international understanding? Ought we not to put into this Bill some time limit to show that when we use fine words about internationalism we mean what we say? The party opposite had better take care if they are not to gain a reputation of hypocrisy.
The second argument for our Amendment is that if the Government managed our affairs well, then the duration and severity of these controls could be reduced within a reasonable time. The Chancellor of the Exchequer said—and I expected him to say this—that under the Bill the Treasury had power to relax all the controls. That is true, but it is Parliament's business to keep under review such a mighty engine of restriction. We on this side of the House decline to leave to the officials of the Bank of England and the Treasury, under the direction of any Chancellor, the sole responsibility of continuing, modifying or abandoning controls which these same gentlemen have invented and have grown accustomed to operate. We do not expect parents to be unprejudiced judges of their own children. On a great issue of this kind, which touches the liberty of the subject so closely, Parliament ought to assert its authority over Ministers and officials, and within a given period demand a review of the principles and practice of the exchange control system.
I want to say a word on the present situation of our foreign exchange resources. The Chancellor told us it is not good, but I think it is a good deal worse than he admitted. The gap between exports and imports, according to the figures, is in the neighbourhood of £300 million sterling a year, but the effective gap is much larger. In the first place, we are selling a great many exports in currencies which cannot be converted into the other currencies we need to pay for our imports. In the second place, we do not know—and we ask the learned Solicitor-General to tell us—to what extent the exports we are making now are being paid for by the release of sterling which is already here. The crucial question is what will be the deficiency in hard currencies next year? We really do need to know that if the House is to have any true understanding of the importance of the Exchange Control Bill. After 15th July, as has been said by my right hon. Friend the junior Member for the City of London (Mr. Assheton), we have to make the proceeds of all imports into this country convertible into other currencies if the senders so desire. What is to happen then? I ask this question because trade and industry very much want to know the answer. Do the Government contemplate that the gap next year will be so severe that they will have to buttress this system of exhange control with much greater control over the direction of exports and a far tighter system of import rationing? Or do they contemplate going on with about the same degree of control over direction and the same degree of import licences? I must ask that question because the White Paper which accompanies the Bill dodges the issue in true Whitehall style.
For my part I think that this White Paper is a skilful piece of advertising which hammers home the slogan, "Exchange control is good for you." But for the serious reader the arguments are inconsistent and incomplete and not creditable to those who drafted them. The White Paper begins, as has been said already, by stating that we need exchange control to make sure of paying for our essential imports. That looks as if the Treasury is in control of the import programme. When we come to paragraph 6, however, we are told something quite different. It says there,

the flow of imports into the United Kingdom is regulated, not by exchange control, but by Import licensing…
That raises a very serious issue because this Bill is designed to be permanent. Are we, then, to take it that import licensing is, in the opinion of the Government, a permanent feature of our economy? It is impossible to make sense of the Bill unless that is true. I therefore ask the hon. and learned Gentleman to tell the House whether or not import licensing is to be a permanent feature of our economy.
Who does in fact determine the nature and volume of our imports? There are three candidates. Is it the Bank of England "swapping" currencies on the retail level? I do not think it is. Is it the President of the Board of Trade planning austerity through the import licensing system? I very much doubt it, in spite of paragraph 6 in the Memorandum. Is it, then, the Chancellor of the Exchequer rationing foreign exchange at the wholesale level? It looks very like it. The House will realise that we must know who has the final authority over the import programme if we are to know what is the true importance of this Bill. The ordinary trader, be he exporter or importer, is in a state of utter confusion on this issue. He sums up his experience in this way: "The Bank of England," he says, "knows how to help and is willing to help. The Board of Trade is willing to help but does not know how to help. The Treasury knows how to help but is not willing." That is the experience of the ordinary trader, and the final result is frustration and loss of trade.
I regret very much that I was not in my place when my hon. Friend the senior Burgess for Cambridge University (Mr. Pickthorn) began his speech. I understand that he made a special point about the way in which exchange control operates today. I would like to repeat it, because the hon. and learned Member for Crewe has most certainly not understood it. The fine art trade of London is one among many of the entrepot trades. It is being strangled because either the President of the Board of Trade or the Chancellor of the Exchequer refuses to give our art dealers sufficient exchange to buy what is cheap in other countries for the purpose of selling it, not in this country, but in a third country, at a reasonable profit.
These men have more experience of pictures, manuscripts, furniture and books than exists in any other capital in the world. Today, they sit with their hands tied, watching their American competitors scouring Europe, with much less experience but with ready cash to offer, and month after month taking away from London a valuable entrepot trade. When tourists come back to this country there will be little or nothing for them to buy in our art galleries and bookshops because the Treasury—I think it is the Treasury —take this extraordinarily short view and deny to the entrepot trade what it needs, so that London becomes a one-way market and fine things can go out, but none can come in.
There is no sense, and so far as I can see no Socialism, in that policy. On business grounds it is folly. I go further. If we are to remain a learned and cultivated society a free movement of fine things in and out of this country is essential. Let not a Socialist administration be accused of handcuffing the fine arts which are such unparalleled ambassadors of international understanding. I trust that hon. Members in all parts of the House will join me in appealing to the Chancellor of the Exchequer to provide reasonable facilities for the import of books for those who wish to learn, and for the restoration of the entrepot trade in fine art in this country. This digression has been intended to show despite what was said by the hon. Member for Balham and Tooting (Mr. R. Adams), it is a fact that foreign exchange control can injure our commerce. We want to see that that is not done in the future.
I come back to the duration of the controls The White Paper says that sterling is a safe and reliable currency. So it is, and so it will remain as long as the American and Canadian loans are not exhausted. When there are no credits to draw upon, what will happen? Then the safety and reliability of sterling will depend upon the skill with which the Government manage our domestic affairs. A system of exchange control by itself cannot guarantee the value of the pound. It cannot restore shaken confidence any more than harness can mend the broken wind of an unsound horse. It cannot be said too often that the danger to sterling comes from mismanagement at home. If British costs and prices are allowed to rise faster than world costs and prices,

we shall only be able—if we can do it at all—to avoid depreciation of sterling below the Bretton Woods limit by a rigid system of exchange control, and, under a siege economy enforced by a brutal system of import licensing.
It depends upon the actions of the Government and particularly of the Chancellor of the Exchequer whether or not we get into that deplorable position. My hon. Friends believe that with prudent management the health of sterling would recover within a reasonable time, but we observe with anxiety that the actions of the Government, and particularly the Chancellor, are calculated not to strengthen sterling but to weaken it. In the present state of our economy, which is impoverished and precarious, the Chancellor should have the overriding objective of ensuring that the whole resources of the nation shall be deployed upon the basis of stable prices and costs. But that is not his objective. British costs and prices are rising steadily, and the rise is actively stimulated by factors well within the control of the Government. I will mention two. The Government are extracting from the people by taxation, far too great a proportion of the national income. This unwholesome and unplanned budgeting is, itself, an efficient cause of inflation and of the weakness of sterling, but the right hon. Gentleman has his own pet dodge for stimulating the rise in British costs and prices and so fastening upon us the continuing necessity for these exchange controls.
By his cheap money policy he has lit a great blaze, and now he cannot put it out. Cheap money is desirable, but it is not to be pursued at the cost of weakening sterling. A man might say, "I feel cold and, somehow or other, I must warm myself." He might then quite rightly throw fuel on his hearth, but if he stokes up with such utter disregard of the consequences that first his chimney and then his whole house are set on fire, will he not have warmed himself at too great a cost? That is what the Chancellor is doing with his cheap money policy. He has succeeded in his legitimate objective of screwing down the interest rate, but in the process he has lit a great blaze and now he cannot put it out.
So important do I think it to show the House the painful consequences of the


Chancellor's actions that I will try to describe what is happening in another way. The Chancellor is like a man in charge of a reservoir which was constructed to ensure an even flow of water to a generating station somewhere in the valley beneath. This reservoir is fed by many streams. The Chancellor can choose to regulate either the level of the water in the lake or the flow of water to the generating station below. He cannot do both. He must choose either to regulate the level of interest rates on Government loans, or to regulate the flow of purchasing power into the market. By a decision of unbelievable folly, he has chosen to control the level of interest rates, and to lose control over the volume of purchasing power coming into the markets. That policy which the Chancellor pursues weakens sterling, diminishes the internal value of the £ and makes it impossible—as, indeed, I think my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman) said—to maintain the external value of the £ with these very cheap money rates without a whole army of exchange controls.
I know this policy to be ruinous. It appears to us on this side of the House that many hon. Members opposite are under the delusion—it has come out in their speeches today—that the taxation and cheap money policies of the Government are intellectually respectable. They are nothing of the kind. Within a year or two these two policies will be seen to be equally disreputable in practice and in theory, and hon. Members opposite then will agree with us that if these two policies had not been pursued, if on the contrary our national resources had been managed with prudence and with good sense, the great majority of the controls asked for in this Bill would have become an unnecessary burden upon the credit and the prosperity of the country. For that reason I beg to move the Amendment.

8.57 p.m.

Mr. Henry Strauss: I beg to second the Amendment so ably moved by my hon. Friend the Member for Chippenham (Mr. Eccles)
So many questions have been put to the hon. and learned Member who is to reply to this Debate that, though I wish

to put a few more, I do not want to burden him unduly at the last moment, and I trust that, if he cannot answer my questions tonight, he will think them over in order that they may be answered at a later stage.
One of the very strong reasons for making this a temporary Measure is the fact that as a permanent Measure it definitely marks an epoch in our legislation. It marks an epoch on two grounds: first of all because it is, as I hope to show, in some real senses the death of freedom. [Laughter.] Secondly, because it is, as I hope to show by quotations from those who do not necessarily support my party, the death of hope in sterling. Let me take the first point first. There was nothing upon which hon. Members opposite were more keen at one time than pointing out how contrary to their conception of international relations was the tyranny which was exercised by Germany under Hitler, and by Russia under its present regime, and how disastrous it was for their conception of international relations that those two countries should rigidly prevent their own citizens from travelling freely in the outside world. Yet, as I will show, under this Bill it is possible for the Chancellor to exercise exactly the same control, and to keep all the inhabitants of this island absolutely unable to follow the advice of the Foreign Secretary which springs very frequently from his idealism. I would not suggest for one moment that foreign travel may not be something which the Chancellor also would think a good thing —it is not his heart I am attacking at this moment, it is his Measure. I am not going to labour the point, because I do not think that any hon. Members would consider it really desirable that the inhabitants of any country should be prevented by their Government from freely travelling abroad.
On the question of credit we are afraid that putting this Bill on the Statute Book as a permanent Measure will produce a lack of belief in sterling, because it will be considered that the British Government themselves have lost their belief in sterling. After all, by making this a permanent Measure we are advertising to the world that we think that we cannot save sterling by encouraging people to want it. That is very important. Let me quote one pregnant sentence from "The


Economist." I thought it very noticeable that, when the Chancellor of the Exchequer gave a list of important papers, he did not find it convenient to mention the very important article in "The Economist" which on the whole is favourable to this Measure. This is what it says:
Alter all, when capital felt safe here, in the absence of control, it did not take flight.
For those two reasons I say this Bill marks an epoch. Now let me come to the main question I wish to put to the hon. and learned Gentleman who is to reply. The Chancellor of the Exchequer was good enough to yield to me to put a point which I think he agreed was germane and important. My intervention was on a question he himself brought out, namely, the importance of distinguishing, in the words of the White Paper, between "current transactions" and "capital movements." He said that it would be the job of himself and the Treasury to make that distinction, however difficult it might be. The question I put to him was how far that would remain a matter for this country, and how far it might be taken out of his hands to give a definition. The words "current transactions" appear in Article I of the Charter of the International Monetary Fund, which is quoted in the White Paper. It seemed to me possible that other nations might be concerned with the definition. I am sure the right hon. Gentleman will realise that this is an important point. Whatever the truth of the matter is, the question I want him to consider is which of the two is foreign travel? He said, in answering my interruption, that if one goes abroad with sixpence that is a "current transaction." but, if one goes abroad with £600,000, that is a capital movement. I agree with him on both points. Let me put to him the intermediate question, which has been put by the "Manchester Guardian," and, I have no doubt, will be put by many foreign nations. They say that ordinary foreign travel is a series of "current transactions" and is not a "capital movement." Will the Chancellor take that view, and will reasonable, and indeed almost unlimited facilities be given for genuine foreign travel, and will it no longer be limited to the ludicrous £75 per annum? These are the concrete points I am putting to the hon. and learned Gentleman who is to reply. The White

Paper says, quoting the Bretton Woods Agreement:
'Members may exercise such controls as are necessary to regulate international capital movements'
Let me put this point quite specifically. Under the Bill the right hon. Gentleman can stop foreign travel altogether, if he wishes. Does he think that under existing international agreements he would be entitled so to do? If he does not think he would be entitled so to do, on what principles does he base his rationing of every traveller who wishes to travel at this arbitrary figure of £75. I came across these words of a French writer whose name at the moment escapes me:
After fifty there is little left for a man— except a fire in his bedroom on a cold night and a little foreign travel in the spring.
[Laughter.] I have confessed my personal interest. I think that the right hon. Gentleman will realise that a love of foreign travel is a perfectly healthy civilised thing, and it is extremely desirable that it should be indulged in, if we want the sort of world which I believe is desired by all Members of the House. I want to put this to the Government Front Bench in all seriousness: If they think they are entitled quite arbitrarily to ration the amount of money permitted to those who wish to travel abroad, they are, in fact, exercising a perfectly arbitrary tyranny as between different classes of the community at home, and are doing it more or less without Parliamentary control.
On what possible ground should we say that Hollywood films are covered by the words of the White Paper, "goods and services which we must import," and that foreign travel is not an activity in which a citizen can claim he must indulge. I can see no greater necessity for Hollywood films than for foreign travel. There is no obvious reason at all, nor do I believe that this is at all popular with any section of the community. I believe that the House was shocked by the revelation of the President of the Board of Trade when he showed that 29 per cent. of what we have so far expended from the American Loan has been spent on oil and films. I say that there is no excuse whatsoever for declaring foreign films a necessity and foreign travel a luxury. As I wish to leave a great deal of time for the Government reply, I only wish to mention two other points in conclusion, just to show how care-


ful must be the consideration and attention which this Bill must receive from the whole House When the Committee stage is reached.
Under Clause 5 of the Bill—I think I am right, but a very distinguished legal authority is to reply—as a matter of law, if an American visitor comes here with his wife, and gives her £2 at breakfast to en able her to go out shopping and to have a meal, he will be committing a criminal offence. I am perfectly well aware that the Chancellor of the Exchequer has no intention whatever of so managing the Bill that anything so imbecile as a prosecution would take place in that event. I think that probably he has had some similar powers already which have not been used in this way. But it is a little alarming, when we want to attract foreign tourists, to have a Clause in a permanent Bill under which such lunacy would be possible. Let me mention another point. In the beautiful version, in the first Gospel, of the Lord's Prayer, we have these words:
And forgive us our debts, as we forgive our debtors.
When this Bill is law, if the forgiven debtor lives outside the sterling area, and the consent of the Treasury has not been obtained, this indulgence in Christian charity will involve a criminal offence under Clause 24. I do not think it unimportant that this Bill, which hon. Gentlemen opposite think such a glorious addition to the Statute Book, has this specific provision. I think that this is the hour that has been chosen at which the hon. and learned Gentleman the Solicitor-General should begin his reply. Therefore, though there are many other points which I should have liked to take, I hope I have said enough to show that there are serious grounds for our Amendment and for refusing to make this a permanent Statute.

9.11 p.m.

The Solicitor-General (Sir Frank Soskice): The Debate has ranged over a large number of subjects. Interesting speeches have been made on the Chancellor's taxation policy, on his cheap money policy, and on various other aspects of our national activities. The issue which, I submit, the House really has to discuss, is whether or not we should adopt a method, well-tried during what I

admits was mostly a war period, of preventing wasteful expenditure of our foreign currency resources. The question is: Do we, or do we not, think it necessary to adopt such a Measure? It does not follow that even if we adopt such a Measure, we should not also press on as hard as we can in increasing our production and reducing unnecessary expenditure in other directions. Quite obviously we should, and we are doing so, and achieving a very great measure of success, as the monthly export returns show; but, however successful we are, I put it to the House that it is still the case that we ought to adopt what is an obviously necessary social Measure, to prevent unnecessary and wasteful pouring out of our limited resources of foreign currency. It is important, but it is quite a separate subject, which must be considered in isolation.
We have had many interesting speeches. The right hon. Gentleman the Member for the City of London (Mr. Assheton) made a particularly interesting speech in which he reviewed, in rather a gloomy vein, what he regarded as the present balance of payments position. He said the position was very serious so far as this country was concerned. He urged upon the Chancellor of the Exchequer, in appealing terms, that every possible step should be taken to harbour our resources, and to avoid wasteful expenditure, in particular of our foreign currency reserves. He dilated upon that aspect of our present economy. He pressed upon the Chancellor the extreme urgency of preserving our foreign exchange resources. Could we have had a more convincing case in favour of this Bill than that which came from the lips of the right hon. Gentleman? In his usual persuasive and fluent manner, he did make out precisely the case which I am trying to make out now. He demonstrated the urgent necessity for what we are doing. I feel that in his heart of hearts, knowing a great deal about these matters, he would like to support the Bill out and out.

Mr. Assheton: indicated dissent.

The Solicitor-General: What the right hon. Gentleman did was to make out a case for it, and then qualify his support in a very hesitating way by saying that he did not think it ought to be permanent. My hon. Friends on this side of the House very naturally said "Well, how long do


you think we ought to have the Bill?" That placed the right hon. Gentleman in a great quandary, because he obviously thought that we should have it for good, but did not like to say so. He tried to evade the question and could not do so, and, finally, was driven to the extremity of saying that the Chancellor of the Exchequer knew a great deal more about the financial and economic situation of this country than he did, and he would leave it to the Chancellor to decide. Well, the Chancellor has decided. He has considered, and the Government as a whole have considered, the position, and, bearing in mind all the cogent arguments which fell from the right hon. Gentleman in his persuasive and interesting speech, came to the conclusion that there was no other course except to place this Measure permanently upon the Statute Book.
The right hon. Gentleman really was driven to saying, though not in so many terms, that he accepted the position that, if we want this Measure temporarily, we equally want it permanently, and he admitted, in turn, that it was necessary temporarily. The right hon. Gentleman no doubt feels extremely uncomfortable, surrounded by his friends, a few of whom went a little way towards supporting him, and a few of whom left him in a charmed circle as if he had got scarlet fever. We certainly do not mean to incarcerate him for good. We should all miss the right hon. Gentleman very much if he did not keep the position which he fills on the Front Opposition Bench, although we would very much like, I am sure, to see him on this side of the House. His speech was a most convincing exposition of the case which I am asking the House to accept. The right hon. Gentleman ended on a very gloomy note indeed. There were almost tears in his eyes and a tremor in his voice when he said that, for lovers of freedom, exchange control was a horror. [HON. MEMBERS: "Hear, hear."] I am very glad to see that hon. Gentlemen behind the right hon. Gentleman support him, and I wondered whether, when I listened to his speech and to the speech of the hon. and learned Gentleman who said that he saw, in the Exchange Control Bill, the death of freedom, whether both hon. Gentlemen bore in mind, when using those words, the sufferings of millions in the interwar years. A French writer once said that a poor man

was as free as a rich man to sleep at night on the banks of the Seine. Is that the sort of freedom that the right hon. Gentleman had in mind? When there were millions of unemployed in this country under Conservative Administrations—

Lieut.-Commander Braithwaite: And Socialist.

The Solicitor-General: —was the right hon. Gentleman more concerned with speculative movements in money from capital to capital, free and unrestrained, than he was for the sufferings of the unemployed? It was the note on which he ended his speech, and I suppose he thought that he had to conclude with a flourish. Actually, of course, we know that he was speaking—and I do not mean this offensively—with his tongue in his cheek—

Mr. Assheton: indicated dissent.

The Solicitor-General: —and that what he wanted to know were the answers to certain specific questions which he asked. I do not want, on the Second Reading of this Bill, to traverse matters which are really more appropriate, in my submission to the House, to the Committee discussion, when each Clause of this fairly long Bill will be examined in detail. He was concerned with regard to the position of foreigners. So far as they are concerned, we have no desire to prevent foreign investment, so long as it conduces to the national interest. He asked whether there would be any inducement for foreigners to invest money in this country. I would say that a stable currency is a very strong inducement indeed. So far as we can bring it about by this exchange control, there will be a stable currency in this country.

Mr. Pitman: Stable withdrawal.

The Solicitor-General: I was addressing myself to the remarks of the right hon. Member for the City of London. As regards the question whether there would be an inducement for the foreigner to come here, there will be the strongest inducement. The right hon. Gentleman asked about switching, the one cent spread, and about transactions by the bankers. With regard to those, I would simply say that the Government are in touch with the banks and that the matter is under consideration. I hope that he will not press


me to go further with regard to these matters at this stage of our discussions.
The hon. Member for Bath (Mr. Pitman) was also extremely concerned because he thought the control would not work. He said his concern was centred in the fact that, in order to make the control work, it was necessary to have the good will of the community for it. When my right hon. Friend opened the Debate, he read out extracts from a great many very responsible journals, who expressed glowing tribute to the Bill. I am sure that all my hon. Friends on this side of the House support the Bill, and that their electors also support it, particularly those who suffered from unemployment during the inter-war period.

Mr. Pickthorn: As the hon. and learned Solicitor-General chooses to discuss this matter largely in terms of unemployment, will he allow me to ask whether he remembers Lord Keynes's view, that the policy of full employment was possible only with free exchanges?

The Solicitor-General: I cannot discourse upon Lord Keynes's view within the ambit of this Debate, and I certainly cannot accept the interpretation which the hon. Gentleman places upon Lord Keynes's view. To develop the point that I was making, so far as the anxiety of the hon. Member for Bath is concerned, we have, apparently, the good will of the whole nation for this Measure, with the exception of a few Conservative Members opposite. Otherwise, everybody seems to be in support of it. Therefore, if the hon. Gentleman is really concerned that lack of good will may stand in our way, I am in the happy position of being able to reassure him on that point.

Mr. Pitman: I would like the learned Solicitor-General to pay me the compliment of listening to what I say. We are all behind this Bill during a time of emergency; that is unquestioned, so far as emergency is concerned. We know that it must be done, and there will be complete unanimity that it should be done and will be done, but the issue we are talking about is that which will arise when the pound is in a normal state of stability.

The Solicitor-General: The newspapers from which my right hon. Friend quoted were not talking about any emergency

period; they were saying, if I may summarise what they said, that this Bill was well calculated to prolong the wartime control into a peacetime period. They said that it was admirably adapted for that purpose. When and if we divide upon the Second Reading of this Bill, my hon. Friends will be voting upon the question of whether this Bill should be permanent, and not whether it should be limited to a period of emergency. That will be the issue before the House if there is a Division.

Colonel Crosthwaite-Eyre: rose—

The Solicitor-General: I hope the hon. and gallant Gentleman does not think me guilty of discourtesy, in not giving way, but I have not much time, and there are one or two other things I want to say. He has his own views as to what was said; hon. Members have heard the actual passages read out, and they can form their own views on whether what I have been saying is right or wrong. I would like to say a word about the arguments which were addressed by the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre). Other hon. Members opposite were concerned about the stringency of the Bill. The hon. and gallant Member for New Forest and Christchurch startled me very much indeed—and I hope he is wrong— by saying that he thought that the provisions of the Bill would be easy to evade. If that is so, it is a serious position indeed, and I hope he will communicate, very secretely, the method of evasion which he has discovered. After prolonged study by experts, it was thought that the Bill was adequately framed to prevent evasion, but if the hon. and gallant Gentleman has found a way of which we had not thought, he certainly would be rendering a service if, with the utmost secrecy, so that no would-be speculator hears of it, he would communicate with us and tell us how it can be done. I can only congratulate him because he has found something which has evaded a great many penetrating and acute minds which have been addressed to this problem.

Colonel Crosthwaite-Eyre: As the hon. and learned Gentleman has now attacked me personally, perhaps he will allow me to say, although I do not pretend to be specially skilled in this matter, that he need only ask his right hon.


Friend the Chancellor of the Exchequer and I am sure the right hon. Gentleman will confirm mat at the moment a great many people come back from Switzerland with more than the £75 with which they left this country. There is no secret about it and it is solely due to the fact that the unofficial rate of exchange in Switzerland for the pound versus the Swiss franc is 100 per cent. less than the right hon. Gentleman is willing to give.

The Solicitor-General: We will have to look into all these things very carefully indeed.

Colonel Crosthwaite-Eyre: On a point of Order. In view of what I have said, may I ask the hon. and learned Gentleman to withdraw the accusation that he has made? I seek your protection on this point, Mr. Speaker. The hon. and learned Gentleman has made a personal attack on me, and I ask for your protection.

Mr. Speaker: I do not know what the learned Solicitor-General said, of which the hon and gallant Member complains.

Colonel Crosthwaite-Eyre: The hon. and learned Gentleman suggested that I knew of some secret means of evading the provisions of this Bill, and said that if I were willing to submit to him, under terms of extreme secrecy what I know, the Government would be able to prevent such an evasion. I appeal to you for your protection, Mr. Speaker.

Mr. Speaker: I do not think it was a personal attack upon the hon. and gallant Gentleman.

The Solicitor-General: I sincerely hope the hon. and gallant Gentleman did not think I was making an attack upon him. I assure him I intended nothing of the kind. What I meant to say was that we were in a great quandary because some hon. Members complained that the Bill was too stringent, and yet the hon. and gallant Gentleman said it was, nevertheless, quite easy to evade its provisions. That disturbed me considerably. He had apparently discovered something that we had not discovered, notwithstanding all our research and study into this matter, and, therefore, in order that it should not become public how easy it is to evade the provisions of this Bill, I asked the hon. and gallant Gentleman to be so good as to

communicate with us secretly how one can find a way through this net.
I now want to deal with other matters which were raised in the Debate. The hon. Member for Torquay (Mr. C. Williams) asked if Eire was within the scheduled territories. It is within the scheduled territories. The hon. Gentleman the senior Burgess for Cambridge University (Mr. Pickthorn) was concerned about whether it would be possible, by virtue of Regulations made under the Clauses of the Bill, for individuals to buy single books, and for dealers to buy pictures. I can answer those questions. There is nothing to stop an individual buying a book, provided he does so within the limit of the currency which he is allowed to take out with him for the purpose of foreign travel.

Mr. Pickthorn: What about buying by post from England?

The Solicitor-General: So far as imports of all sorts are concerned, they depend upon the import licensing machinery and not upon the Clauses of this Bill. If a particular dealer or importer obtains a licence enabling him to import pictures or to import books, then the necessary currency will be supplied to enable him to make use of that licence.

Mr. Eccles: rose—

The Solicitor-General: I am extremely sorry; I hope the hon. Gentleman does not think I am being discourteous if I do not give way, but I have not very much more time.

Mr. Eccles: It needs a special licence.

The Solicitor-General: I now wish to deal with the matter on more general lines. We are in the advantageous position of having a currency control which we know from the experience of the last seven years will work. I am not saying, as was suggested by an hon. Member opposite, that we want to adopt it simply because we used it for the last seven years. Not at all. A case has to be made for introducing a permanent system of control. 'Many hon. Members on this side of the House indicated that the necessity for using a control might arise suddenly; it might arise in five years, or 10 years—-one does not know how long hence. There might be a sudden flight from the pound for various reasons—for varying international world trade movements. Therefore, there is a case, if the


control is found to be an efficient control, for keeping it permanent. Hon. Members who argue that the Bill should be temporary in its extent and its provisions, entirely misconceive the object of the Bill. A stable currency is permanently useful. The Bill is designed to promote a permanently useful purpose. It will be as desirable for the promotion of world trade that there should be a stable British currency 20 years hence, even 50 years hence, as it is now. It is in order to provide one of the means of supporting the pound by preventing wasteful use of foreign currency, that we are asking the House to give a Second Reading to this Measure.
Therefore, I put it to the House that there is a case for a permanent Measure of exchange control, and that the question is whether this Measure which we are asking the House to adopt will be, in fact, an efficient Measure. It is in connection with that angle of the argument, that I remind the House that we have, in fact, seen this control working, and working efficiently and without complaint, for a period of seven years, six of which were war years. If it worked efficiently during war, there is no reason why it should not also work efficiently during peace. The question is: Is this an efficient system of control? [HON. MEMBERS: "No."] We have seen it work during war, so far as control is concerned. So far as the test of its efficiency is involved, the conditions of peace— particularly the conditions of an unsettled peace, if there should be one-will be amply equivalent to wartime conditions for the purpose of ascertaining whether that is a valid test.

Viscount Hinchingbrooke: Does the hon. and learned Gentleman apply exactly the same test to a Regulation like 18 (B)?

The Solicitor-General: I do not think I could apply the same test if I were driving a motor car, to see that it was an efficient motor car. I am not talking about 18 (B), and I will not try to discuss it, any more than I will discuss any other completely irrelevant question. The question is whether this control functioned efficiently during the war. Expert opinion, as reflected in the Press, is of the opinion that it did function efficiently. If it functioned well then, there is no

reason why it should not continue to function well; and the whole point about this Bill is that it does reproduce the provisions of the wartime control, with improvements in the direction suggested by the commentaries in the Press. One such commentary was that the wartime control had functioned so well because it relied upon the principle of delegation.
The system of control, embodied in this Bill, proceeds even further in that direction, because, as my right hon. Friend the Chancellor of the Exchequer pointed out, the banks, now acting as authorised dealers, will be principals in the transactions that they undertake. Before, they were agents of the Treasury, and agents of the Treasury only. Therefore, the principle of delegation to the banks has been carried even further. That is an improvement upon an admittedly good system of control which functioned under Defence Regulations during the war. In the matter of control of transfers of securities there is, equally, an important improvement. The system now is, not that securities have to be placed at the disposal of the Treasury and registered for that purpose, but that there are restrictions upon the transfer of securities, and that they are paralleled in the case of bearer securities by the requirement that they should be deposited with authorised depositaries, who will retain custody of them. So that the Bill does embody an improved system on the wartime system of control, which, itself, did function efficiently:
If the House accepts the view, which I urge upon it, that the object is a permanently useful object, that it is an object which will be as useful 50 years hence as it is now, that the Bill is an efficient instrument to achieve that object, then, obviously, the case is made out for making this a permanent Bill. Clearly, if we still wanted to achieve the object towards which the Bill is designed, it would be nonsensical to scrap it seven years from now, or in 10 years' time, or at any other period the right hon. Gentleman thinks appropriate, when we will have further improved it by further matured experience of its operation.
The Government were faced—I say this with regard to the question of stringency —with this alternative. Either they could take modified powers, or they could take all the powers they were advised were necessary in the Bill itself, and relax them


by Orders made under the Bill. They have chosen, and I ask the House to say they have wisely and properly chosen the latter course. If one is to have any system of exchange control, it is unfair to the respectable and honest trader to have one which does not function in such a way as to control everybody. If it is possible to evade the provisions of the control, the persons who benefit are those less scrupulously minded, who do not mind profiting at the expense of the more careful section of a saving community, who are prepared to abide by the spirit as well as by the letter of the Bill. For these reasons the Bill is framed as it is.
My right hon. Friend has called attention to Clause 31 of the Bill. That is the Clause under which exempting Orders will be made, roughly speaking, with the proviso that the Treasury must give permission. Relaxation will be introduced under Clause 31. So that the way in which the Bill should be judged is, by regarding it as giving what are full powers but are nevertheless only the minimum powers requisite; and Clause 31, which is really the heart of the Bill, will be used to the fullest extent in order to relax the full severity of the operation of the Bill. I ask the House to say that the question really before us is this: is an exchange control required; that the answer to that is overwhelmingly "Yes"; that my right hon. Friend's arguments were quite conclusive; and that, if we have exchange control, there is no reason to limit it?
The hon. Member for Chesterfield (Mr. Benson) gave very strong reasons for the view that we ought to perpetuate the system. There are other reasons which I have endeavoured to put before the

House for saying that it should be permanent. I ask the House to say, therefore, that the answer to the second question is that undoubtedly this Measure should be a permanent Measure. If that is so, the sole remaining question is, is the system which we have devised an efficient system, and accordingly one which we should adopt as our permanent system? With regard to that, I remind the House that we have seen this system working for seven years; it has worked properly, and it has since been improved. For those reasons I ask the House to say that the answer to the three questions which they have to answer must be in the affirmative, and I accordingly ask the House to give this Bill a Second Reading.

Mr. Spearman: The hon. and learned Gentleman has said on more than one occasion that this Bill would provide a stable currency; does he mean by that that, even if we get wage inflation and costs rising in this country beyond those abroad, still because of this Bill we shall have a stable currency?

The Solicitor-General: I thought I had made it perfectly plain, and I certainly intended to say, that this Bill was one of the Measures which the Government are adopting towards rebuilding our economy. Rebuilding our economy involves having a stable currency, but this Bill by itself, if it is not assisted by other. contributory Measures, will not be enough. Nevertheless, this Bill itself is necessary.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 300; Noes, 125.

Division No. 11.]
AYES.
[9.42 p.m.


Adams, Richard (Balham)
Bing, G. H. C.
Chamberlain, R. A.


Adams, W. T. (Hammersmith, South)
Binns, J.
Champion, A. J.


Allen, A. C. (Bosworth)
Blackburn, A. R.
Chater, D.


Allen, Scholefield (Crewe)
Blenkinsop, A.
Chetwynd, G. R.


Anderson, A. (Motherwell)
Blyton, W. R.
Clitherow, Dr. R.


Anderson, F. (Whitehaven)
Boardman, H.
Cluse, W. S.


Attewell, H. C.
Bowden, Flg.-Offr. H. W.
Cobb, F. A.


Austin, H. L.
Bowles, F. G. (Nuneaton)
Cocks, F. S.


Awbery, S. S.
Braddock, Mrs. E. M. (L'pl, Exch'ge)
Coldrick, W.


Ayrton Gould, Mrs. B
Braddock, T. (Mitcham)
Collick, P.


Bacon, Miss A.
Brook, D. (Halifax)
Collindridge F


Baird, J.
Brooks, T. J. (Rothwell)
Collins, V. J.


Barnes, Rt. Hon. A. J.
Brown, George (Belper)
Colman, Miss G. M.


Barstow, P. G.
Brown, T. J. (Ince)
Comyns, Dr. L.


Barton, C.
Bruce, Maj. D. W. T
Cook, T. F.


Battley, J. R.
Buchanan, G.
Cooper, Wing-Comdr. G.


Bechervaise, A. E.
Burden, T. W.
Corbel, Mrs. F. K. (Camb'well, N. W.)


Bellenger, Rt. Hon. F. J.
Burke, W. A.
Corlett, Dr. J.


Benson, G.
Byers, Frank
Cove, W. G.


Berry, H.
Callaghan, James
Crossman, R. H. S


Bevan, Rt. Hon. A. (Ebbw Vale)
Castle, Mrs. B. A.
Daines, P




Dalton, Rt. Hon. H.
Jones, Elwyn (Plaistow)
Reid, T. (Swindon)


Davies, Clement (Montgomery)
Jones, J. H. (Bolton)
Rhodes, H.


Davies, Edward (Burslem)
Jones, P. Asterley (Hitchin)
Ridealgh, Mrs. M.


Davies, Ernest (Enfield)
Keenan, W
Robens, A.


Davies, Hadyn (St. Pancras, S.W)
Kenyon, C
Rogers G. H. R.


Davies, Harold (Leek)
Kinghorn, Sqn.-Ldr. R
Royle, C.


Davies, R. J. (Westhoughton)
Kinley, J.
Scollan, T.


Davies, S. O (Merthyr)
Kirby, B. V
Segal, Dr S.


Deer, G.
Kirkwood, D
Shackleton, Wing-Cdr. E. A. A.


Delargy, Captain H. J.
Lang, G.
Sharp, Granville


Diamond, J.
Lavers, S.
Shawcross, C. N. (Widnes)


Dobbie, W.
Lee, F (Hulme)
Shurmer, P.


Dodds, N. N.
Leslie, J. R.
Silkin Rt. Hon. L.


Donovan, T.
Lever, N. H.
Silverman, J. (Erdington)


Dugdale, J. (W. Bromwich)
Lewis, A. W. J. (Upton)
Silverman, S. S. (Nelson)


Dumpleton, C. W.
Lewis, J. (Bolton)
Simmons, C. J.


Durbin, E. F. M
Lewis, T (Southampton)
Skinnard, F. W.


Dye, S.
Lindgren, G. S.
Smith, C. (Colchester)


Edelman, M.
Lipson, D. L.
Smith, Ellis (Stoke)


Edwards, A. (Middlesbrough, E.)
Lipton, Lt.-Col. M
Smith, H. N. (Nottingham, S.)


Edwards, Rt. Hon. Sir C. (Bedwellty)
Logan, D. G
Smith, S. H. (Hull, S.W.)


Edwards, John (Blackburn)
Longden, F
Snow, Capt. J. W


Edwards, N. (Caerphilly)
Lyne, A. W.
Sorensen, R. W.


Edwards, W. J. (Whitechapel)
McAdam, W.
Soskice, Maj. Sir F.


Evans, John (Ogmore)
McEntee, V. La T.
Sparks, J. A.


Evans, S. N. (Wednesbury)
McGhee, H. G.
Stamford. W


Ewart, R
McGavern, J
Steele, T.


Fairhurst, F.
Mack, J. D.
Stephen, G.


Field, Captain W. J.
McKay, J (Wallsend)
Strauss, G. R. (Lambeth, N.)


Fletcher, E. G. M. (Islington, E.)
Mackay, R. W G (Hull, N.W.)
Stross, Dr. B.


Foot, M. M.
McKinlay, A. S.
Stubbs, A. E.


Forman, J. C.
Maclean, N. (Govan)
Summerskill, Dr. Edith


Fraser, T. (Hamilton)
McLeavy, F.
Symonds, A. L.


Freeman, Peter (Newport)
MacMillan, M. K. (Western Islet)
Taylor, H. B. (Mansfield)


Gallacher, W.
Macpherson, T (Romford)
Taylor, R. J. (Morpeth)


Ganley, Mrs. C. S.
Mainwaring, W. H.
Thomas, I. O. (Wrekin)


Gibbins, J.
Mallalieu, J. P. W.
Thomas, John R. (Dover)


Gibson, C. W.
Manning, C. (Camberwell. N.)
Thomas, George (Cardiff)


Gilzean, A.
Marquand, H. A.
Thomson, Rt. Hn. G. R. (Ed'b'gn, E.)


Glanville, J. E. (Consett)
Marshall, F (Brightside)
Thorneycroft, Harry (Clayton)


Goodrich, H. E.
Mathers, G
Thurtle, E.


Gordon-Walker, P. C.
Medland, H. M
Tiffany, S


Greenwood, Rt. Hon A. (Wakefield)
Mellish, R J.
Timmons, J


Greenwood, A. W J (Heywood)
Middleton, Mrs. L
Tolley, L.


Grenfell, D. R
Mikardo, Ian
Turner-Samuels, M


Grey, C. F.
Mitchison, Maj G. R
Usborne, Henry


Grierson, E.
Monslow, W.
Vernon, Maj. W


Griffiths, Rt. Hon. J. (Lianelly)
Moody, A. S.
Viant, S. P


Griffiths, W. D. (Moss Side)
Morgan, Dr. H B.
Wadsworth, G


Gunter, R. J.
Morris, P (Swansea, W.)
Walkden, E.


 Guy, W. H.
Morrison, Rt. Hon. H. (Lewisham, E.)
Walker, G. H.


Haire, John E. (Wycombe)
Mort, D. L.
Wallace, G. D. (Chislehurst)


Hale, Leslie
Moyle, A.
Wallace, H W. (Walthamstew, E.)


Hall, W. G.
Murray, J. D.
Warbey, W. N.


Hamilton, Lieut.-Col. R.
Nally, W.
Watkins, T. E.


Hannan, W. (Maryhill)
Nayler, T. E.
Watson, W M


Hardy, E. A.
Nichol, Mrs. M. E (Bradford. N.)
Weitzman, D


Harrison, J.
Nicholls, H. R. (Stratford)
Wells, W T (Walsall)


Hastings, Dr. Somerville
Noel-Baker, Capt. F. E. (Brentford)
Westwood, Rt. Hon. J


Henderson, A. (Kingswinford)
Noel-Buxton, Lady.
While C. F. (Derbyshire, W)


Henderson, Joseph (Ardwick)
Oldfield, W. H.
White, H. (Derbyshire, N.E.)


Hen son, Miss M.
Oliver, G H.
Whiteley, Rt. Hon. W.


Hewitson, Capt. M.
Paget, R. T.
Wigg, Col. G. E.


Hobson, C. R.
Pargiter, G. A.
Wilkins, W. A.


Holman, P.
Parker, J.
Willey, F. T. (Sunderland)


Holmes, H. E. (Hemswarth)
Paten, Mrs. F. (Rutholiffe)
Willey, O. G. (Cleveland)


Horabin, T. L.
Paten, J. (Norwich)
Williams, D. J. (Neath)


House, G.
Pearson, A
Williams, J. L. (Kelvingrove)




Williams, W. R. (Hasten)


Hubbard, T.
Peart, Capt. T. F.
Williamson, T.


Hudson, J. H. (Ealing, W.)
Perrins, W.
Willis, E.


Hughes, H. D. (Wolverhampton, W.)
Piratin, P.
Wise, Major F. J


Hutchinson, H. L. (Rusholme)
Platts-Mills. J. F F.
Woods G. S.


Hynd, H. (Hackney, C.)
Poole, Major Cecil (Lichfield)
Wyatt, W.


Irving, W. J.
Porter, E. (Warrington)
Yates, V. F.


Isaacs, Rt. Han. G. A.
Porter, G. (Leeds)
Young, Sir R. (Newton)


Janner, B.
Prill, D. N.
Zilliacus, K.


Jeger, G. (Winchester)
Proctor, W. T.



Jeger, Dr S. W. (St. Pancras, S.E.)
Randall, H. E.
TELLERS FOR THE AYES:


John. W.
Ranger, J.
Captain Michael Stewart and


Jones, D. T. (Hartlepools)
Rees-Williams, D. R.
Mr. Popplewell.







NOES.


Aitken, Hon. Max.
Haughton, S. G.
Peto, Brig. C. H. M.


Amory, D. Heathcoat
Headlam, Lieout.-Col. Rt. Hon. Sir C.
Pickthorn, K.


Assheton, Rt. Hon. R.
Henderson, John (Cathcart)
Pitman, I. J.


Barlow, Sir J.
Herbert, Sir A. P.
Ponsonby, Col. C. E.


Beechman, N. A.
Hinchingbrooke, Viscount
Poole, O. B. S. (Oswestry)


Bennett, Sir P.
Holmes, Sir J. Stanley (Harwich)
Raikes, H. V.


Birch, Nigel
Howard, Hon. A.
Rayner, Brig. R.


Boles, Lt.-Col. D. C. (Wells)
Hudson, Rt. Hon. R. S. (Southport)
Reed, Sir S. (Aylesbury)


Bossom, A. C.
Hurd, A.
Renton, D.


Bowen, R.
Hutchison, Lt.-Cm. Clark (E'b'rgh, W.)
Roberts, Maj. P. G. (Ecclesall)


Bower, N.
Hutchison, Col. J. R. (Glasgow, C.)
Robnson, Wing-Comdr Roland


Boyd-Carpenter, J. A.
Keeling, E. H.
Ropner, Col. L.


Braithwaita, Lt.-Comdr. J. G.
Kerr, Sir J. Graham
Ross, Sir R.


Buchan-Hepburn, P. G. T
Lambert, Hon. G.
Scott, Lord W.


Butcher, H. W.
Legge-Bourke, Maj. E. A. H
Shepherd, W. S. (Bucktow)


Carton, E.
Lindsay, M. (Solihull)
Snadden, W. M.


Challen, C
Linstead, H. N..
Spearman, A. C. M.


Clarke, Col. R. S.
Lucas-Tooth, Sir H.
Spence, H. R.


Clifton-Brown, Lt.-Col. G.
MacAndrew, Col. Sir C.
Stoddart-Scott, Col. M.


Corbett, Lieut.-Col. U. (Ludlow)
McCallum, Maj. D.
Strauss H. G. (English Universities)


Crookshank, Capt. Rt. Hon. H F. C.
MacDonald, Sir M. (Inverness)
Teeling, William


Crosthwaite-Eyre, Col. O. E.
Macdonald, Sir P. (Isle of Wight)
Thorneycroft, G. E. P. (Monmouth)


Crowder, Capt. John E
Mackeson, Brig. H. R.
Thorp, Lt.-Col. R. A. F.


Darling, Sir W. Y.
Mekie, J. H. (Galloway)
Touche, G. C.


Davidson, Viscountess
Maclay, Hon. J. S.
Turton, R. H.


Digby, S. W.
Maclean, Brig. F. H. R. (Lancaster)
Vane, W. M. F


Dodds-Parker, A. D.
Macmillan, Rt. Hon. Harold (Bromley)
Wakefield, Sir W. W


Donner, Sqn.-Ldr. P W
Maitland, Comdr. J. W.
Walker-Smith, D.


Drewe, C.
Manningham-Buller, R. E.
Ward, Hon. G. R.


Dugdale, Maj. Sir T. (Richmond)
Marlowe, A. A. H.
Webbe, Sir H. (Abbey)


Ecoles, D. M.
Marples, A. E.
Wheatley. Colonel M. J.


Erroll, F. J.
Marshall, O. (Bodmin)
While, Sir D. (Fareham)


Fletcher, W. (Bury)
Marshall, S. H. (Sutton)
White, J. B. (Canterbury)


Foster, J. G. (Northwich)
Mellor, Sir J.
Williams, C (Torquay)


Fraser, Sir I. (Lonsdale)
Morris, Hopkin (Carmarthen)
Willink, Rt. Hon. H U


Gage, C.
Morrison, Maj. J. G. (Salisbury)
Willoughby de Eresby, Lord


Galbraith, Cmdr. T. D.
Mott-Radolyffs, Maj. C. E.
Winterton, Rt. Hon Earl


Glossop, C. W. H.
Neven-Spance, Sir B.
York, C.


Gomme-Duncan, Col. A. G.
Nicholson, G.
Young, Sir A. S. L. (Partick)


Gridley, Sir A.
Noble, Comdr. A. H. P.
TELLERS FOR THE NOES:


Hannon, Sir P. (Moseley)
Nutting, Anthony
Commander Agnew and


Hare, Hon. J. H. (Woodbridge)
O'Neill, Rt. Hon. Sir H.
Major Conant.


Harvey, Air-Comdre. A. V.
Orr-Ewing, I.L.



Main Question put, and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the

Whole House, for Monday next—[Mr.R. J. Taylor.]

EXCHANGE CONTROL [MONEY]

Considered in Committee, under Standing Order No 69.

[Major MILNER in the Chair]

Resolved:
That, for the purposes of any Act of the present Session to confer powers, and impose duties and restrictions, in relation to gold, currency, payments, securities, debts and the import, export, transfer and settlement of property, and for purposes connected with the matters aforesaid it is expedient to authorise—

(a)the payment out of moneys provided by Parliament of any expenses incurred under or by virtue of the said Act by any Government Department; and
(b) the payment into the Exchequer—

(i) of any sums received under or by virtue of the said Act by any Government Department; and

(ii) of such part as may be specified in the said Act of fines imposed on the summary conviction of offenders against the said Act."—(King's Recommendation signified.)—[Mr. Dalton.]

Resolution to be reported upon Monday next.

SEIZURE OF FOOD ORDER

9.56 p.m.

Sir John Mellor: I beg to move,
That the Seizure of Food Order, 1946 (S.R. &amp; O., 1946, No. 1823), dated 8th November, 1946, a copy of which was presented on 13th November, be annulled.
This Order repeals and re-enacts a rather similar Order which was made in 1942. The Order authorises an officer of the Ministry who believes that an offence has been committed in respect of an article of food to seize that article. It further authorises the Ministry to sell the article of food. Food in this Order is given a very wide definition. It covers all food for human consumption and food


for animals, including cattle, pigs, sheep and poultry. It is quite properly provided that where no conviction of the owner takes place, or perhaps there is no prosecution, the proceeds of sale of the article of food shall be paid to the owner, but—and this is the critical point, and the object of my main objection—the proceeds of sale are defined as the proceeds, less the Minister's expenses of seizure and sale. I think that that leads to a rather curious and indeed astonishing result. It means that an innocent owner whose goods have been seized by an officer of the Ministry pays the Minister's expenses of seizure, although the seizure is proved to be totally unnecessary.
It may be that the Parliamentary Secretary, when she comes to reply, will say: "That is quite true, but all this appeared in the Order of 1942, and we have had no adverse experience." She may say: "We have had no complaints." That may be true; I do not know. But my point is that if Parliament made a mistake in 1942 that is no reason why that mistake should be repeated in 1946, especially when we are now in a position to regard these Statutory Orders with a far greater degree of vigilance than was possible in the House in 1942. In order to ascertain the Minister's reaction, and indeed to give him an opportunity of revoking the Order and introducing another Order which would not contain this objectionable element. I put down a Question, and the Question and answer appeared in HANSARD on 20th November. I asked the Minister of Food:
why the Seizure of Food Order, 1946 (S.R. &amp; O. 1946, No. 1823), provides that the Crown shall retain any expenses of seizure out of the proceeds of sale by the Crown of an article of food, even when the owner has been acquitted of any offence alleged in respect of that article; and whether he will remove this injustice by revoking the Order.
The Minister of Food replied:
The wording in the Order is not "expenses of seizure" but "expenses incurred in connection with the seizure and sale" and in practice this means expenses incurred in selling the goods. I do not think any injustice is involved in making a charge for the expenses of sale, since these would be incurred by the seller in any case. So I do not propose to revoke the Order, which since 1942 has provided powers essential to the effective exercise of our controls."—[OFFICAL REPORT. 20th November, 1946; Vol. 430, c. 109.]
One should regard the Minister's words

with rather close attention. He said:
In practice this means expenses incurred in selling the goods.
Does he mean by those words that, in fact, no expense can be incurred in the course of seizure? I hardly think the hon. Lady will seek to defend such an explanation. If that were true, then the words to which I have referred are completely meaningless and unnecessary, and certainly ought to be removed, but in my submission the expenses of seizure can be very substantial indeed when we look at the category of various foods which are included in the definition. As I have pointed out, they include cattle, pigs, sheep and poultry, and I should imagine that the seizure of such livestock could involve quite an expensive operation. If I am right, this Order is unjust on the face of it. If the Minister is prepared to allow it to be annulled tonight, it will not involve the slightest difficulty to the Department. The Minister could make a fresh Order tomorrow leaving out these objectionable words. All that the Minister need do, as far as I am concerned in this argument, is to leave out the words "seizure and" in Paragraph 2 (2). Surely, if the Minister agreed—and I think that in framing the answer which I have read, he did agree—that these words are objectionable, he ought to be prepared to take Steps to remove them. In this matter we ought to have the support of hon. Members opposite, because, after all. this is the sort of point at which the House of Commons should look, and if I make a case, as I submit I have done, hon. Members will have the opportunity of seeing whether the hon. Lady the Parliamentary Secretary can destroy it. If they do not think that she has destroyed my case they ought to support this Motion for the annulment of the Order. After all, this is an opportunity for them to show a spirit of independence without running the risk of bringing down the Government. They will be able to pride themselves on the fact that for once they voted on the merits.

Mr. Leslie Hale: I would be obliged if the hon. Gentleman would tell the House whether, when the Order was passed in 1942 in identical terms—[HON. MEMBERS: "No."]—in precisely identical terms, he lodged a Prayer against it, and if the hon. Gentleman protested against the wording as he is protesting now.

Sir J. Mellon: I am very much obliged to the hon. Gentleman for his interruption I have already observed that the House of Commons in 1942 failed to observe this, and I accept my full degree of responsibility for having omitted in 1942 noticing this objectionable feature in the Order at that time. There has been no change in my attitude in this Parliament. In the last Parliament I voted frequently against Government Orders of this character and on points of this description. While I must admit that I was not sufficiently vigilant to observe this defect in 1942, I am sure that the hon. Member will accept my explanation that it was not from any hesitation to call attention to such matters that I did not raise it then. If I had noticed it I would have prayed to annul it and I would have voted against the Government.

Mr. Hale: I accept the hon. Member's explanation with great pleasure, and I would just ask him to tell the House now if he knows of any specific cases of abuse which have occurred since 1942.

Sir J. Mellor: I explained earlier, I think, that it was quite possible that the Parliamentary Secretary to the Ministry of Food would tell the House that her Ministry had no experience of any objections, and that she might say that that was one reason why the Order should be allowed to continue. I argued that that ought not to be accepted by the House, that we ought to consider this Order on its face value and, if we found something objectionable in its term, we ought to insist that a fresh Order should be introduced and this one revoked. I have rested my case on a very narrow front, and if the hon. Lady has any reply now, because up to now the Ministry have failed to make any reply, it should be extremely interesting. I think that my hon. Friends on this side of the House will develop the attack on this Order on wider grounds. However, I have made my case, and I ask the House to be willing to annul the Order in order that a fresh Order may be introduced by the Ministry without the objectionable feature of this one.

10.9 p.m.

Mr. Spence: I beg to second the Motion.
I should like to make it clear to the House and to the hon. Lady the Parlia-

mentary Secretary to the Ministry of Food that on this side there is no objection whatsoever to the underlying purpose of this Order. The objection is to the unfairness that is accidentally created in the Article which has been quoted. What the Order means is, that if a person is suspected of an offence against the Ministry of Food, whatever station that person may be in or whatever his walk of life, the article of food which causes the suspicion is removed and he is given back what has been realised from the sale, less the cost of sale and the cost of seizure. I hasten to say, in making this point, that I am going a little further than my hon. Friend who moved this Motion. In order to be perfectly fair—and I think it is the purpose of this House always to be fair— when someone has been suspected of an offence and food is confiscated and sold— which should be the case if the person is found guilty—the food should be replaced in kind if he is subsequently found to be innocent. What could be fairer than that? A stock of this or that may be held for perfectly legitimate reasons; if it is taken away and sold and money is afterwards given in its stead, that does not replace the stock. The Minister has said again and again that she supports the consumer and wants to be fair to the people. I feel that the Order as it stands works unfairly to the unfortunate individual suspected of an offence and subsequently proved to be not guilty of that offence.
There are one or two other points upon which I should like to touch and which I think are important. In the Order, no direction is given that the official of the Ministry who makes the seizure should give a receipt. Surely that is not common sense. I admit the necessity of the seizure, since if black market goods are found on the move, they must be seized as they are found. In recommending that the House should ask the Minister to reconsider this matter tonight, I emphasise this point of equity and fairness on which we are all agreed. If this Order comes into operation as it stands it will not be a good thing for the House of Commons. We stand for fairness to all, and hon. Members opposite, in particular, insist on that. When I say that a man who is subsequently proved not guilty has to suffer under this Order, surely hon. Members opposite will not go into the Lobby against us tonight?

Hon. Members: Oh!

10.13 p.m.

Mr. Marlowe: I think some hon. Gentlemen opposite have not quite understood what this Order is about I noticed that when my hon. Friend put forward the suggestion that hon. Members opposite should vote in our Lobby he was greeted by jeers, mainly from hon. Members opposite who have not a copy of the Order in front of them. Many of them, I should think, are not conversant with the terms of the Order. There was one interruption in particular from an hon. Gentleman opposite who suggested that as this Order had been in force for four years we should leave it as it is. If the hon. Gentleman had looked at the Order he would have seen that so far from having been in force for four years the present Order is new in one vital respect, as is made clear in the explanatory note. This says that the provision of the original Order has been enlarged, to authorise the seizure of food in respect of which it is believed that a price offence has been committed.

Mr. Janner: Will the hon. and learned Gentleman elaborate that remark and explain—

Mr. Marlowe: I gave way because I thought that the hon. Gentleman had a helpful suggestion to make.

Mr. Hale: As the hon. and learned Gentleman suggested that I had not read the Order I am sure he will give way—

Mr. Marlowe: I will give way when I have dealt with the hon. Member for West Leicester (Mr. Janner). I can deal with only one at a time. As I was saying, I gave way because I thought that the hon. Member was about to say something helpful. All that he is asking me to do is to develop my argument, which I assure him I was about to do in any event. This Order enlarges the previous Order. It gives the Minister's inspector the power to seize, if he believes that an offence has been committed. No one would complain if someone who had been dealing in black market supplies suffered pecuniary loss. The danger is that this Order hits at the innocent. It is not enough that it deals also with the black market people. Perhaps hon. Members opposite do not realise that an inspector could come into any of their houses, take a chicken from their table and say, "I believe you got this in the black market." When the hon. Gen-

tleman concerned had been found innocent, he would not get the chicken back. He would be given some money, which would be the price of the chicken less the cost of seizure and of sale. One does not know what costs would be taken into account. For instance, the expenses of running the department concerned with seizure, the wages of the inspector, and such matters might be reckoned as costs of seizure. There might not be very much money left.

Mr. Scollan: Will the hon. and learned Gentleman tell us what is the cost of seizing a chicken?

Mr. Marlowe: Unfortunately the Order is not drafted specifically to give us any information on that point. The costs might be quite heavy. Where a legitimate dealer is being deprived of goods, which have been removed from his warehouse, and where he has been subsequently found innocent, he will not get his goods back. It is not right to take a course which will inflict pecuniary loss upon a perfectly innocent person who has committed no offence, and against whom there may have been no reason for suspicion. The paragraph does not even require that the inspector should have a reasonable belief in the guilt of the person concerned. All that needs to happen is that the authorised officer may believe the person to be guilty. He may be quite wrong, but pecuniary loss will be one of the consequences of that belief. I believe this proposal to be unjust and to be a very improper approach for a Government Department to bring in an order which inflicts pecuniary loss upon a subject without giving him any remedy whatever, when the seizure may have been entirely wrong. The man accused may be entirely innocent and the inspector entirely wrong in his belief. The matter can easily be put right, and I ask the hon. Lady to look into the matter. Let her admit that there has been an oversight, and put the matter right.

Mr. Hale: As the hon. and learned Member was good enough to say that I had not read the Order, and as I understand that his argument is now developed —although I do not quite know what it was—perhaps he will allow me to say that the difference between the old Order and the new Order is that in the new Order there are words to the effect that the number of offences in respect of which


action can be taken is now strictly limited, whereas they were not so limited in the Order of 1942.

Mr. Marlowe: I am now confirmed in my belief that the hon. Member has read neither of the Orders. I suspected before that he was not more than four years out of date.

10.20 p.m.

Sir Ian Fraser: My hon. Friends have, I feel, made out a case. There is a point here for reasonable consideration. I submit that it is a point of real principle. It is deplorable that so many hon. Members opposite should be willing to let pass an Order which possibly perpetuates an injustice, which is drafted with needless strictness, and which interferes unduly and unfairly with the liberty of the subject. All over the country people are becoming more and more acquiescent in Orders and Regulations which interfere with their daily lives. It is deplorable that hon. Members, who come to this House declaring their belief in freedom and their interest in the common people, should sit there ignobly and pusillanimously willing to allow to pass by, merely for the sake of convenience or for the amour propre of a Minister, a piece of legislation which, if it were in a Bill and had to go through all the stages of a Bill, would undoubtedly be thrown out. There is a point of principle here. It is time that hon. Members of all parties in the House stood up for the rights of the House of Commons, the first of which is to prevent Governments from making tyrannical and objectionable proposals—

Mr. Speaker: The hon. Gentleman is getting on to a very wide subject and is now speaking of all kinds of Orders. He must deal with the Order under discussion, and must not continue in such general terms.

Sir I. Fraser: This Order is one of those which impose needless charges and great unfairness upon people, and because it is, in itself, bad, as my hon. Friends have shown, and because, in my submission, it offends against most important principles, I ask the House to vote against the Minister in this matter.

10.23 P.m.

Mr. Challen: It is obvious from the comments already made

upon this Order that there are many fallacies contained in it. The fact that this is an old Order which is being re-imposed with some slight alteration does not prevent this House from considering ab initio the whole principle involved. In fact it imposes a greater responsibility on this House this evening to consider whether this Order should ever have been produced in 1942 in the original form. The only point I wish to make—there are many others which could be made— is in relation to the words mentioned by the hon. and learned Member for Brighton (Mr. Marlowe):
Where it is believed by an authorised officer…
We are basing the whole justification for seizure and sale of another man's goods upon the mere belief of what is called "an authorised officer." "Authorised officer" is defined in Article I as meaning any person authorised by or on behalf of the Minister. It also includes any constable and any member of the Royal Ulster Constabulary. I do not know whether that means any constable of the Royal Ulster Constabulary, but whether it means any constable in England, Scotland or Wales, as well as any member of the Royal Irish Constabulary, I do not particularly concern myself. It is quite obvious that the person authorised can be a constable, can be any office boy or clerk, in fact any individual, male or female, delegated by some gentleman or lady in the Ministry of Food. This particular individual may hear some gossip in a local cafe or public house about some particular goods owned by a retailer, and there and then go off and seize those goods or, as my hon. and learned Friend the Member for Brighton said, take his chicken off his table and sell it merely upon his own belief.
I wish to stress this point, that there is no redress from that individual's belief. You cannot take the case to the High Court and charge him with not having acted reasonably, whereas the whole basic principle of all enactments of this nature, according to our law, has hitherto been that belief has to be based upon reasonable grounds. We know that principle so well from the famous Order I8B which was adjudicated upon by the House of Lords some years ago, where even the Home Secretary was required to act upon certain reasonable


grounds in detaining His Majesty's subjects under I8B. The whole point of the dispute was whether it was open to the High Court to decide whether the Home Secretary had reasonable grounds, and the House of Lords, not without high authority to the contrary, held that the reasonable grounds could be decided upon by the Home Secretary himself, and that no outside body had power to decide whether the Home Secretary had reasonable grounds.
Here, however, even the police constable is not required to have reasonable grounds; he is not asked to determine in his own head whether it is reasonable for him to hold that belief. Many people of many creeds have the opinion that their rivals in other creeds hold beliefs that are based upon no reason, or have no basis in theory or fact. Nevertheless people hold those beliefs very strongly, and they go to the stake on behalf of them. Surely, when we come to the purely practical point of a person authorised by the Minister to seize somebody else's property, we require a little more than that particular individual should believe that an offence has been committed? If one examines the particular offence, one finds that it is of a very involved nature indeed. There are all kinds of alternative provisions. under which an offence might be committed, and this particular unknown person who is to be authorised to seize somebody else's property very often has not the legal knowledge to know whether an offence has been committed. What, in fact, happens? He is instructed by some official in the Ministry of Food to go and take that property. That is all the belief he has, and I beg to suggest that we are infringing to a very high degree upon the liberty of the subject, and upon the basic principles that ought to determine these matters, when we repose in a police constable, or in any other ordinary individual, the right to seize property in those circumstances without his belief being based, at any rate in his own opinion, upon some reasonable grounds.

10.29 P.m.

Mr. Janner: I shall detain the House only for a few minutes. I suggest that the hon. and learned Member for Brighton (Mr. Marlowe) has himself, apparently, either not read the

Orders properly, or has not appreciated the significance of the Defence Regulations appertaining to the Orders and referred to in the Orders. If he had he would not have spoken in such a flippant manner about the interventions of the hon. Member for Oldham (Mr. Hale) and myself. The hon. and learned Member was, apparently complaining of the fact that there was an enlargement in this Order, of the provisions contained in the 1942 Order.
The only enlargement, if it is an en-largment, is that Regulation 55AB of the Defence Regulations has been included as well as Regulation 55. Regulation 55AB refers to even more serious offences, I think my hon. friends will agree, than Regulation 55, and all that this Order does is to include offences which are referred to in Regulation 55AB. It reads as follows:
The competent authority may be ordered to provide for controlling the prices to be charged for goods of any description, "etc.
All that this Order does is to include these items. I could understand the point made by hon. Members opposite that cases of seizure are something that must be taken into consideration, and to that extent I agree with them, but I certainly cannot understand the hon. and learned member rising in such a wrathful manner.

Colonel Gomme-Duncan: Did I understand the hon. Member to say Bothwell?

Mr. Janner: No, I said"wrathful."I would certainly not have used the other word in this particular connection. I have only one other point to make. I think hon. Members have agreed that this Order is essential except in so far as the words complained of are concerned, but I would ask them to recollect that it is practically impossible to leave out words of this description. [HON. MEMBERS: "Why"?] First, in the case of a person who has offended, and is found guilty, it is perfectly obvious that the cost of seizure should be paid by him. In the case of a person found not guilty, it is no good saying that any officer could just come up and take anything he wants. If there was any ulterior motive in an officer taking such an action, there is a method in the law of the land by which that can be put right. The officer knows full well he must do what the law allows, and that be must have reasonable grounds for the action he


takes. [HON. MEMBERS: "No."] I should like to know whether any officer would dare to take a chance, if there was not reasonable cause for him taking action. The case argued by the Opposition is too absurd for words. The facts prove that to be so. No such action as they suggest has ever arisen. Otherwise we should have known within the history of the Order of 1942 that such people had been brought before the courts and that action had been wrongfully taken. Therefore, in view of the serious nature of the offences with which we are dealing, I submit that these Orders, and this one in particular, must be retained. Hon. Members who have raised this point have really raised it on very trivial grounds which in themselves may defeat the very object for which they wished to have the Prayer annulled.

10.33 p.m.

Colonel Sir Charles MacAndrew (Ayand Bute, Northern): I would like to say a few words about this Order. It was passed by the Committee of which I am now chairman, and, as the House knows, it is one which could not be considered under the terms of reference of the Committee, because this Order being in the same terms as that of 1942, we could not say it was unexpected. It had happened before, but I do feel that if the Order had come before us for the first time, if it had been new to us, it would have been unexpected, and it would have been one about which we would have called for evidence from the Department. Speaking for myself, I feel I ought to tell the House that in circumstances such as those I should have felt it desirable to call for a report from the Department concerned, and in turn to have asked the Committee to make a report to the House.

10.35 p.m.

Mr. Royle: I am not arguing for this Order in legal terms. I have no knowledge of legal terms, but I have the advantage of knowing something about the Order from another point of view. I happen to have been an officer of the Ministry of Food and I have had to do some seizing. I have had occasion to go to farms where a licence has been granted to slaughter a pig. The farmer, or someone in his employ, ha? slaughtered that pig, and I have discovered that many of these pigs had eight feet. Seriously, I want to suggest that hon. Members opposite

who are asking for the annulment of this Order are playing into the hands of the black marketeers.

Sir J. Mellon: Cannot the hon. Member see that there is nothing to prevent the Minister, if this Order were annulled tonight, making a further Order tomorrow, omitting the offending words?

Mr. Royle: It does not alter my point of view. I am quite confident that if this annulment went through tonight, it would definitely encourage the activities of the black market. Hon. Members opposite are asking us to annul the Order for the purpose of safeguarding against the possibility of an odd slip, but they completely ignore the dangers which exist on the opposite side.

Mr. Spence: The hon. Member has admitted that the Order is bad [HON. MEMBERS:"NO."] Will he not agree that a new Order that is watertight and sound, could be placed on the Order Paper tomorrow?

Mr. Royle: I do not believe it is possible. I go further and say, out of my own experience covering the years of the war, that no Ministry of Food official would take action at all unless there were reasonable grounds for him to take that action. I speak for a very large number of people whom I know. I am quite sure that no case can be pointed out where action has been taken throughout the war years when action has not been justified. Not only have I had experience as a Ministry of Food official. I am also a trader in articles of food. I want to say that all the honest law-abiding traders in food in this country are definitely behind the Order. I claim that I have more authority to say things like that, than hon. Members opposite have to make the statements we have heard tonight. I say that knowing the traders in food in this country. I am quite sure they are behind the Order and that, as a whole, they would object to the annulment of the Order. It is right that the fact that an article of food has been stolen should be circulated in the first place through the proper channels; it is also right, in the second place, that an article of food should ultimately be paid for by the Ministry in cases such as have been mentioned There is nothing in the Order to prevent that. I suggest that the Prayer for the annulment tonight is flippant in the extreme.


We on this side of the House, in many such Debates as this, have resisted the temptation to get on our feet because we have not wanted to prolong Debates which, in the main, have been flippant.

Major Legge-Bourke: On a point of Order. Is it in Order for an hon. Member to refer to a Prayer as being flippant when you, Mr. Deputy-Speaker, or Mr. Speaker have allowed it to be moved?

Mr. Deputy-Speaker (Major Milner): There is nothing that is not Parliamentary in what the hon. Member has said.

Mr. Royle: I must repeat it. I was not really trying to stress that point but I am drawn to my feet tonight because of what I feel to be excessive flippancy. I know what I am talking about when I say that there has never been, in my experience, anything which would justify hon. Members objecting to this Order.

10.42 p.m.

Sir Wavell Wakefield (St. Marylebone): The hon. Members who moved and seconded the annulment of this Order have made a clear case, showing that grave injustice may be done to innocent citizens under the Order. The hon. Member for West Salford (Mr. Royle) said that by asking for the annulment of this Order we on this side are playing into the hands of the black market. The hon. Member may not know that the only way to draw attention to the slip which he himself admits occurs in this Order—

Mr. Royle: I did not say that.

Sir W. Wakefield: —is to ask for its annulment. An Order cannot be amended. I think it is within the recollection of the House that the hon. Member opposite thought there was a slip in this Order.

Hon. Members: No.

Mr. Royle: I am sure that the hon. Member has not taken my words as I said them. I am sure the OFFICIAL REPORT will show that. I want to get my own words perfectly understood, as far as I can. What I said was that it was possible that such a thing might occur, which is altogether different from suggesting that it has occurred.

Sir W. Wakefield: I was in no way misrepresenting the hon. Member. I was

under the impression that he said that there was a slip. [HON. MEMBERS: "No."] I said I was under that impression. [HON. MEMBERS: "Withdraw."] The hon. Member says he did not say that, but that it is possible there may be a slip.

Hon. Members: No.

Mr. Deputy-Speaker: The hon. Member must be permitted to make his speech.

Sir W. Wakefield: The mover and seconder of the Motion have clearly shown that there has been a slip—let us put it that way—and that innocent people may be unjustly treated. From the interjections of hon. Members opposite, it would seem that it is suggested that, because this Order has been in force for some four years or so, therefore, it ought not to be altered even if, in the original instance, it was a bad Order.

Mr. Sydney Silverman: The hon. Member did not say anything like that.

Sir W. Wakefield: I did not say he did. I said that, judging from the interjections of hon. Members opposite, it is evident that they feel in the way I have suggested. I listened to hon. Members opposite, for many years, saying how legislation which ought to have been altered, had not been altered for five, 10, 15 or 20 years. We on this side are doing our utmost to alter some bad legislation and make it into good legislation within four years. I should have thought that hon. Members opposite would have supported us in our endeavours. I thought that hon. Members opposite would stand up for justice, and support the innocent—and it is quite clear from the terms of this Order that innocent people are going to suffer. I simply cannot understand why we have had no speech from hon. Members opposite in support of unfortunate and innocent people who are proved not guilty.

Mr. Shurmer (Birmingham, Sparkbrook): Quote us a case.

Sir W. Wakefield: Tonight it has been left once more to the Conservative Party to champion the rights of the common man by asking for the annulment of this Order. Once again the Conservative Party have shown that they are on the side of right. I ask the Minister to look


at this Order fairly and justly, and to agree to its annulment and to the substitution for it of an Order which will prevent all black market racketeering. We on this side are just as anxious as hon. Members opposite to stop racketeering. We know perfectly well that this Order could be put right, and a fresh one substituted, without in any way assisting the black market. [HON. MEMBERS: "Speak up.] I am speaking up, so that I may be heard by those who are not too deaf to understand a right and just cause, and so that no one can go away from this House and say that they have not heard a few words in defence of the common man.

10.48 p.m.

Mr. Raikes: When the hon. Lady the Parliamentary Secretary once addressed a joint meeting in support of a proposition to arm the female members of the Home Guard, I felt that she had courage. I hope that when she replies she will have courage enough to assist some of us to redress a wrong. There has been a lot of talk about the black market, but hon. Members opposite know perfectly well that what we are discussing here is not a question of the black market at all. Under Article 2 of the Order, as it stands, the cost of a seizure may have to be borne by innocent parties. An hon. Member opposite, who I am sure has admirable knowledge, said he did not think there was any likelihood that any responsible officer would act unreasonably in these matters. I am not disagreeing with him on that, but he went on to say further that there was a possibility of a loophole for a possible mistake. There is always that possibility unless the words are absolutely precise, and if we in this House wait, before remedying faults and possible dangers, until the innocent have suffered, this House will have failed to maintain the duty which is upon it.
The only real solution is for this Order to be re-enacted tomorrow with two words, "seizure and," left out. That would ensure that an innocent person shall not be in the position under this Order of having to pay for the seizure as well as for the sale. That seems to me to be the real point at issue, and if I may say so it was rather cheap to drag in the point about the black market.

10.51 p.m.

Major Legge-Bourke: There are two points which it seems to me need explanation. One is the definition of food. As I understand it, food can include cattle, pigs, sheep and poultry. But no mention is made in paragraph (1) of the Order of whether or not these cattle, pigs, sheep or poultry are alive or dead. It seems very important to me that we should know what they are, because the hon. Lady is extremely interested in food production. Take the example of a cow producing tuberculin tested milk. What I do not understand about this Order is whether or not it affects cattle while they are alive. If so, what are the Orders at the present moment which restrict the purchase of such cattle? It seems to me this Order as it stands gives the power to an authorised officer of the Ministry of Food—and this is taking an extreme example, I admit—to go to a farmer and say "You have no business to possess this cow. I am going to take it away." And for all the owner knows the cow may be sold on the market and a high price obtained for it. Or suppose it is a pedigree animal, and a low price is obtained for it. If that is the case, and the owner is proved to be completely innocent, all that he is going to get is the amount that the Minister has managed to achieve as a result of the sale, less the expense of the Ministry of Food which might be one-quarter or less of the value of the cow sold.

Mr. Royle: Is the hon. and gallant Member aware that all meat in these days which is the product of cattle, sheep, pigs, and so forth, is sold according to grade, and there is a price for each grade?

Major Legge-Bourke: I am perfectly aware of what the hon. Member has said but in the Order there is no indication of whether the cattle are alive or dead. It is important that we should have that cleared up. I seem to remember that the hon. Member said that he was no lawyer, and had no legal experience. Yet at the end of the speech he had the presumption, if I may be pardoned the use of the expression, to say there was no alternative to the drafting contained in this Order. Either he is a legal expert or not. If he is not, then his point is not in Order.
There is another point in this Order, and that concerns the word "forage."


In paragraph (1) of the Order the word "forage" is defined, but for some extraordinary reason, the word does not appear again. I do not know, therefore, why it has been included in the Order at all.

Mr. Hale: The word "forage" appears in the definition of "food." The word runs throughout the Order. With regard to the hon. and gallant Member's other point about live or dead cattle, the objection to the right to destroy is because food is perishable. If the cattle are alive there is no particular reason to sell or dispose of them; but if they are dead they may have to be sold.

Major Legge-Bourke: If the hon. Member reads the Order he will find that the word "food" is defined separately in another paragraph, and "forage" is defined underneath that. As regards the other point, I would suggest that if the hon. Member imagines that livestock are not sold, in these days, he should go into some provincial town and see a market going on.
The last point I want to raise arises out of "the extension of the explanatory note. The hon. Member for West Leicester (Mr. Janner) tried to give a completely different interpretation of the extension of this Order compared with previous Orders of the 1942 vintage. As far as I can make out, his argument simply boils down to the fact that the explanatory note is untrue or inaccurate.

Mr. Janner: Indeed, no. What I said was that the explanatory note referred to the fact that since Regulation 55 of the Defence Regulations was passed there had been a new Regulation known as Regulation 55AB which referred to offences which in some regards were even worse than those referred to in Regulation 55, and that consequently the extension was merely one which followed naturally.

Major Legge-Bourke: I should have thought that the only interpretation which this House was entitled to put on this Order was the explanation given by the Ministry. The hon. Member's interpretation will not quite do. If I may, I will give one example, which I think may be amusing, of the interpretation of this Order, which occurred in my constituency not so long ago. If hon. Members will read the Order again they will

find that food and drink are included, the only drink excluded being water. Not so long ago, a keg of what purported to be whisky was purchased by an innkeeper in my constituency. When an endeavour was made to draw off the whisky from the keg, it was found that there was water coming out. When the matter subsequently went before the quarter sessions it was disclosed that the keg had been very carefully primed and contained a little glass container of whisky, the rest of the contents being water. I raise this particular matter because, as I understand it, the only person who comes into this Order is the owner. The owner in this case would have been the man who purchased it. Let us suppose for a moment—though this is not in question, I think—that the whisky was purchased fairly at the regulation price. Let us suppose that after purchase, an article is found to be completely bogus. Is the owner to be held responsible, or is it to be the originator of the bogus article? As the Order stands, the owner of that keg of whisky would be the person who purchased it at the intermediate stage. I suggest that the person who really should come in under this Order is the originator. It seems to me that this Order, from the points I have raised, is extremely untidy. The definition of food is completely vague, and gives no indication whether the cattle, sheep, pigs, and poultry are alive. I would endorse the remark of my hon. Friend the Member for Sutton Coldfield (Sir J. Mellor) in regard to forage.

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summerskill): If the hon. and gallant Member looks at the Order, he will see, in the last line but one, the words:
Forage, and cattle, pigs. sheep, and poultry,
and that the Order then goes on to define "forage.

Major Legge-Bourke: I quite understand the point, but at the same time, I should like to endorse the remarks made by my hon. friend the Member for Sutton Coldfield, that a refund will not suffice the owner, in view of the shortage of feeding stuffs. I hope therefore that the hon. Lady will redraft this Order to make it possible for the Ministry to guarantee replacement of forage instead of merely providing compensation.

11.2 p.m.

Mr. Manningham-Buller: The hon. Member for Nelson and Colne (Mr. Silverman), in one of his usual interlocutory interjections, made a suggestion that a Member should first read an Order before making a speech in regard to it. I only wish that the hon. Member for West Salford (Mr. Royle) had followed that advice, because it seemed to me that the words he uttered bore no relation to the Order under discussion. I shall seek to indicate in what respect his observations were entirely fallacious and misleading. Speaking with all the authority of an ex-officer of the Ministry of Food, he said that no Ministry of Food officer ever took action unless it was reasonable. I have no doubt at all that no officer of the Ministry of Food ever takes action unless he thinks it is reasonable, but I should be astonished if the hon. Member can give information that prosecutions brought by the Ministry have in every case been successful. What we are concerned with here is where a prosecution has been launched by an officer of the Ministry, and it is shown, on facts produced which were not known by the Ministry, that the action should not have been taken.
The hon. Member says that the Prayers brought up by the Conservative Party are in the main flippant. [HON. MEMBERS: "Hear, hear."] I thought that would bring some jeers from Members opposite, but if they regard it as a flippant matter that a man should be punished for an offence he has not committed, then the country at large will know what importance to attach to their statements, when they say that they exist to protect the rights of the individual. There is no question here of playing into the hands of the blackmarketeer. If a man has been guilty of a black market offence, he can be prosecuted and convicted. The question raised by this Prayer is whether an innocent rather than the guilty man should be punished. The rule in this country, until we had a Socialist Government, was that a man should be deemed innocent, until proved guilty. Under this Order as it stands—[HON. MEMBERS:"A Lord Woolton Order."]—a Lord Woolton Order made in war time; and hon. Members opposite who talk so glibly of progress, seem to be reluctant to improve this Order. Under this Order as it stands, if an innocent person has his food seized, what does he get? Merely the proceeds of

the sale, less the expenses of the Ministry of Food.

Mr. Janner: May I ask my hon. and learned Friend one question? The Order does not say "must. "It says "may," and I should say that that means that when the Ministry examine the reasons for the confiscation, if they are satisfied there is no offence, no case is made out.

Mr. Manningham-Buller: The hon. gentleman, who is no friend of mine, has apparently misread Article 4. He seems quite content to appoint Ministry of Food officials to return food to the owner, who has been deprived of his goods for no reason whatever. It seems to me that this Order raises a matter of high principle, and I hope that when the hon. Lady replies she will not deal with it in any flippant fashion. It is obvious to any-' one who has taken the trouble to read the Order that it would be easy to put this Order in such a form that a person deprived of his food or forage could, if it were shown that the deprivation was wrongful, be compensated in full for the loss which he had suffered. Under Article 4, he will be compensated, but only to the extent of the proceeds of the sale less the expenses of the Ministry of Food. The innocent person will get back less than was taken from him, and all because of an erroneous view taken by an official of the Ministry of Food. If one does justice to a person found to be innocent, in a case of this kind one will not be breaking the law of the land.

11.8 p.m.

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summerskill): I have listened carefully to the several speeches in this Debate, and I have been surprised at the legal wrangles which have taken place between the legal experts. I must say that I was particularly surprised to hear the hon. and learned Member for Brighton (Mr. Marlowe) challenge this side of the House and tell us that we had not read the Order. Of all the wrong interpretations we have heard to-night— and there have been several—his was the worst. He read the explanatory note, and said that the provisions of the original Order have been enlarged to authorise the seizure of food. Therefore, he said, something must be added to the Order, more than was in the 1942 Order. Unless he has digested Regulation 55AB he cannot understand it. The explanatory note


means that the provisions of the original Order, which were diminished by the addition of Regulation 55AB, have been enlarged to authorise the seizure of food in respect of which it is believed that a price offence has been committed.- Since one of the most effective controls on black markets had been lost, its restoration is naturally desired.
It has been. suggested that a lot of innocent people have been summoned. I assure the House that this is the first complaint that we had. The number of acquittals is very small. I think in all there were 1,100 cases, and of these 10 resulted in acquittal. Provision is made in this Order for the seized article to be sold in accordance with the instructions given by or on behalf of the Minister of Food, the proceeds of the sale, less any expenses incurred, to be paid towards the satisfaction of any fine that may be imposed, or paid to the owner. The hon. and learned Member for Brighton said that if the House gave the Ministry such powers, the Ministry's officials would come along and charge up all sorts of little extras. I assure him—and I ask him to examine such cases as he may have heard of—that in no circumstances do we charge what might be regarded as Ministry's expenses. We charge only the expenses of transport and any expenses incurred in seizing and selling the article.

Mr. Manningham-Buller: In Article 2 we find these words:
…the proceeds of the sale, less any expenses incurred by or on behalf of the Ministry in connection with the seizure (hereinafter called 'the proceeds of the sale') shall be dealt with in accordance with the provisions of the Order.
and in Article 4 we read:
the proceeds of the sale thereof shall be returned or paid to the owner.
Surely that means the proceeds of the sale after the deduction of expenses?

Dr. Summerskill: We do return the proceeds of the sale after the deduction of expenses, but what I am dealing with at the moment is what the deductions are. The hon. and learned Member for Brighton has suggested that the Ministry's officials might have their own expenses included in the deduction. As a matter of fact, the Ministry bears those expenses and the owner is not called upon to bear ex-

penses of that kind. Hon. Members might ask, what other expenses are incurred. Let me recall a case. We were trying to trace some cooking fats to a hotel on one occasion and the enforcement officers were making investigations near the hotel. They found 5,000 eggs in dust bins. What happened? First the police van was called to take those eggs on their first little journey. Then transport of another kind, a car, lorry or whatever it was, took the eggs to the nearest packing station. Expenses of that kind would be charged.

Mr. Marlowe: Why?

Dr. Summerskill: The hon. and learned Member must remember that even if the man is innocent, the Ministry of Food has incurred expenses in the selling of the innocent man's eggs, which the innocent man would have incurred himself.

Lieut.-Commander Gurney Braithwaite: But this is for seizure.

Sir J. Mellor: Would the hon. Lady tell us quite squarely why an innocent owner should bear any of the Ministry's expenses of seizure?

Dr. Summerskill: I have explained to the hon. Member. I find it very difficult to understand what he means by expenses of seizure.

Sir J. Mellor: It is in the Order.

Dr. Summerskill: I am now defining expenses as they are. The hon. Member, for instance, has separated seizure from sale when he has said, "Let us remove those two words, seizure and." That would not effect his purpose at all, because it still leaves "sale" and our expenses in the case to which I have referred were incurred in selling the eggs. Most of the goods are perishable, and if we have to pay the cost of a refrigerator, there again we incur more expenses. In other words, the powers of the original Order have been diminished. It is necessary to introduce this in order to restore the powers which we have exercised since 1942. I shall also try to prove that the hon. and learned Gentleman has been wrong in some other respects. I can assure the House that this Order contains nothing that was not in the Seizure of Food Order, 1942, made at the time of the Coalition Government.

Hon. Members: In wartime.

Sir C. MacAndrew: If the hon. Lady will cast her mind back she will remember that at that time there was no Committee such as we have now dealing with Orders. There was such an outcry from all sides of the House to check this sort of thing that the Committee was set up. I hope she will realise that if anything like this had come up the Committee would have drawn the attention of the House to it.

Mr. S. Silverman: Does my hon. Friend also realise that the hon. and gallant Member for Ayr and Bute, Northern (Sir C. MacAndrew) speaks entirely for himself, and that I, as a Member of the Committee, even if it had existed in 1942, would not have shared his view?

Mr. Manningham-BulIer: Would the hon. Lady confirm that this Order was made in 1942 either by a secretary or a deputy secretary of the Ministry of Food?

Dr. Summerskill: I accept everything that the hon. and learned Gentleman says, but I do not think he would be so tolerant if a doctor made a wrong diagnosis during the war, and came along now and said, "I was rather rushed because it was wartime." If he has a responsible job to do he should do that job with all due sense of responsibility. The fact is—and I ask Members opposite to examine the Order carefully—that power to make Orders controlling prices was removed from Regulation 55, and inserted in the new Regulation 55AB. An offence, therefore, against a prices Order was no longer a breach of control. That is the relevant point, and the correct interpretation has been put upon it by my hon friend the Member for West Leicester (Mr. Janner). The Seizure of Food Order, 1942, no longer gave us powers to seize articles of food where the offence committed was one contravening our price regulations. If Members will read Regulation 55AB they will see that this has been made quite clear. If I may say so, the mover of the Motion has not read the Order carefully, because there is no need to delete the words, "seizure and," so as to make the Order meet his wishes. This Order gives us power to deduct expenses, but there is no reason why we should exercise that power. [HON. MEMBERS: "Oh."] Until this Order is accepted by this House the Ministry are deprived of their power to seize food believed to have been bought

in the black market at excessive prices. I think that an innocent man probably would have to incur expenses approximately the same as we incurred on his behalf.

Mr. Manningham-Buller: I wonder if the hon. Lady would deal with this point. Why should an innocent person be made to pay anything for the seizure and sale by the Ministry of Food of goods, which, if left in his possession, he would have consumed?

Dr. Summerskill: Hon. Members opposite are talking about an innocent man. What I am saying is that if the food has been seized when the man is suspected, and if when we have made inquiries we prove to our satisfaction that the man is innocent, the food is returned, or if it is very perishable, it is sold and the amount is returned to the man without any deductions whatever.

Mr. Spence: If what the hon. Lady says is true, then there are no grounds for this Prayer. If a man is proved innocent and the food is returned to him or sold and the proceeds refunded to him without deduction, the Prayer is not necessary.

Dr. Summerskill: I hope the hon. Member will realise that the mover of the Prayer has been talking about the man who has been acquitted. I think that some hon. Members have been using the term "innocent" too loosely. I am now dealing with the man on whose premises rationed food has been found in circumstances which, to say the least, are suspicious. We would seize the food and I repeat, if the food was very perishable we would sell it, and then, if no charge was proved against him— —

Mr. Challen: rose—

Dr. Summerskill: No, I will not give way. I would remind the House that if the Order were annulled the Minister would have no power of seizure at all, where maximum price Orders have been contravened. The need for the power has been proved and established, especially in the cases of the inveterate and deliberate offenders among barrow hawkers. They cheerfully pay the small fines that are imposed on them in magistrates courts, when convicted of certain offences against the food regulations. but when they learn that the food is to be seized then the think


more than twice about committing the offence. Where such goods are seized and sold by the Minister, the moneys realised, less the selling expenses, are paid to the owner. In such cases, therefore, the seizure of the food is not expropriation, but merely deprivation of the trader of capital for a few working days. I think no hon. Members in this House can object to the powers so exercised, and I would like to assure the House, as I have already indicated to the hon. and learned Member for Brighton, no deduction is made for expenses other than those that have been actually incurred in the disposal of the goods, for example, the transport charges or agent's commission, and the suspected man, would himself have to pay commission charges.

Sir J. Mellor: Could the hon. Lady explain why it is necessary for the Order to make any reference to seizure?

Dr. Summerskill: I ask the hon. Member to examine the Order. Our powers' of seizure are defined in the Regulations, and I must ask him to examine that carefully.

Sir J. Mellor: I was, of course, referring to the expenses of seizure.

Dr. Summerskill: If an officer has seized food, I presume that he would regard the kind of transport that I have described, as part of the expenses of seizures If you seize food you have to put it on something; you have to take it to some place where it can be stored. Therefore, transport would be one of the costs of seizure. I have already explained to the House that in these cases where goods are retained and subsequently returned to the owner, no charge has ever been made for expenses for transport, storage, or any other charges. Since the Ministry sells on the owner's behalf, surely there is no injustice in charging him the expenses incurred; certainly there is no question of the Minister making any profit. I think I have already explained to the House that this Order has been operating without complaint. I would not, for one moment, say that an acquitted man might not experience some injustice. But there is no need to annul this Order. [HON. MEMBERS: "Remedy it."] Certainly I am quite prepared to look at every case. I have told the House there have been ten acquittals out of 1,100 cases.

Mr. Manningham-Buller: The hon. Lady has made a most important statement. She says she is prepared to examine every case. Of course we welcome that. But surely it would be much better, instead of leaving it to her discretion—and I know she will exercise it well—that the people of this country should know where they stand. Would not the hon. Lady consider making a fresh Order, ensuring that no innocent person will be penalised?

Dr. Summerskill: I have already explained that there is no necessity for fresh Orders. Surely hon. Members can trust the Ministry. [HON. MEMBERS: "No."] I have already told hon gentlemen opposite that their leader, the chairman of their organisation, was responsible for this matter. They trusted him when the Order was made. Unfortunately they did not examine it sufficiently closely, according to what they say now. If I undertake to examine those ten cases which have occurred this year, I am not making any loose promises; I am simply making a generous admission, when I say that perhaps some of these acquitted men—none of whom has complained to us—may have felt there has been some injustice. That would be the last thing the Ministry of Food would want to do, and, therefore, I shall certainly examine every case. In the future, when a man is acquitted, a most careful investigation will be made with a view to seeing how the proceeds of the sale of the seized goods shall be administered.

Major Legge-Bourke: May I ask one question? The hon. Lady has not explained fully this matter of sales. She has, apparently, not considered it. This Order takes no consideration of a person who has no intention of selling the article which is seized. Will the hon. Lady consider redrafting the Order, to cover those people who never wanted the stuff sold, but whose stuff is sold by the Ministry when it is seized, the people. thereafter, being found innocent?

Dr. Summerskill: The hon. and gallant Member must realise that the commodities mentioned here are perishable. That is why we talk about selling them.

11.31 p.m.

Mr. Boyd-Carpenter (Kingston-upon-Thames): The hon. Lady the Parliamentary Secretary has just made an announcement to the House which is of not inconsiderable importance. As I under-


stand it—and she will correct me if I misrepresent her—she has admitted the possibility that this Order may work injustice to innocent persons, and she, therefore, has said to my hon. and learned Friend the Member for Daventry (Mr. Manningham-Buller), that in such cases she will give personal examination to every case. That assurance of the hon. Lady is, no doubt, very creditable to her sense of justice, but it does not conclude this matter. I do not know whether the hon. Lady can appreciate the fact that, to a great many people of this country, their right to freedom from penalty, unless they are convicted of an offence, is, a vital thing. It is something which they regard as having of right, and not by the favour of any Minister of the Crown. The Parliamentary Secretary has said that, of her kindness, and the kindness of her Department, she will consider removing the penalties imposed upon the innocent. That is not good enough. If this House has any function, it is, surely, to ensure that penalties are imposed only on the guilty. The very fact that the hon. Lady has seen fit—advisedly—to make the very significant admission with which she concluded her speech, is an overwhelming argument in favour of taking back this Order, and recasting it in accordance with the established principles of law and justice in this country. There is a perfectly clear admission in the hon. Lady's statement—and, indeed, it is an inescapable admission if one considers the terms of this Order—that innocent people can be penalised
I take no doctrinaire attitude on this matter. At the height of the great emergency of war, it is, no doubt, inevitable that innocent people should suffer in the national interest. But the hon. Lady has quoted figures which show conclusively that no such situation arises at present. A few moments ago she told this House that of 1,100 prosecutions undertaken under the previous Order only 10 had resulted in acquittal. Accepting as, I am sure, the House will, the accuracy of those figures, what conceivable public interest is served by victimising those 10 people? If the machinery of prosecution of her Department is so demonstrably efficient as to permit that quite remarkable batting average, then, surely, there is no justification, on any grounds of public interest, for ensuring that those 10 people shall suffer for offences of which

they have not been convicted. The hon. Lady went on to argue that, because a similar Order -similar, at any rate, in its objectionable features—had been introduced in the year 1942 by the late Coalition Government, then hon. Members on this side of the House were prohibited from arguing against this Order. The hon. Lady cannot have it both ways. The late Coalition Government, be it good or bad, was supported by both major parties in this House, and whether it were so good or so bad a Government, it follows, inevitably, that both parties are entitled to argue that something done by that Government, in the heat of the gravest emergency this country has ever known, shall be freshly considered in time of peace. I do hope that the hon. Lady will not, in the case of this new House of Commons—which I understood had come here to sweep away all the relics of the past and to establish a glittering new order —try to justify an Order merely because the Coalition Government put forward something similar. Surely the hon. Lady will not argue, whoever else may do so, that the mandate of the electorate in 1945 was in favour of a religious and scrupulous adherence to everything which the Coalition Government had ever done?
The issue is simple. Has any justification been brought forward for penalising innocent people? The hon. Lady, as I understand it, made no attempt to do so. She went, at some length, into a delicately-phrased and, it would appear, rather carefully prepared argument on the distinction between the expenses of seizure, and the expenses of sale, but as I understood that argument, it was an argument that there were expenses of seizure as distinct from expenses of sale. I do not know whether the hon. Lady assents to that summary of her argument, but that was how I understood it. If her argument in reply to the hon. Baronet was that there were expenses of seizure as opposed to expenses of sale, and expenses so serious as to warrant the terms of this Order, I do not know whether the hon. Lady appreciates that, not for the first time in her career, her statements are entirely contrary to those made by the right hon. Gentleman the Minister of Food. When the right hon. Gentleman answered a written Question put by the hon. Baronet, he committed himself to this proposition:


The wording in the Order is not expenses of seizure 'but' expenses incurred in connection with the seizure and sale of any product This means expenses incurred in selling the goods.
By no possible argument can that—for the right hon. Gentleman the Minister of Food —comparatively clear statement be reconciled with the elaborate argument of the hon. Lady in favour of maintaining the penal clause in respect of expenses of seizure. The hon. Lady is in this dilemma: either her right hon. Friend is right, and there are in practice no expenses of seizure, or what conceivable reason is there, what justification is there, for putting in this Order a provision to exact from the innocent person the expenses of seizure? The hon. Lady really cannot have it both ways.

Dr. Summerskill: I think the hon. Gentleman is a little confused. May I recall the illustration I gave of the eggs? The eggs are seized, they are carried to the place where they will be sold; who can say whether the cost of transport is an expense of seizure or of sale?

Mr. Boyd-Carpenter: I am inclined to agree with the hon. Lady as against her right hon. Friend. I was not attempting to argue that there were no expenses of seizure, I was only attempting to point out to the House the manifest difference between the view entertained by the hon.

Lady and that held by her right hon. Friend. If the hon. Lady challenges me, I am inclined to agree with her as against her right hon. Friend; I think there are expenses of seizure, and for that very reason—for the very reason that the hon. Lady and I are both right—this Order is the more serious, because this Order in evitably implies the imposition of those expenses upon innocent persons. I do hope that hon. Members opposite will respond to the appeal made by the mover of this Prayer. This is no party matter. and I ask hon. Members opposite are they really prepared to go back to their constituents, as sooner or later they will have to go back, and tell them that on a matter which raises no party principle of any sort whatever but is a matter of simple English justice they have voted for the imposition of what may be very heavy penalties on persons who have never been prosecuted. or who when charged have been found not guilty by the courts of justice in this land. I hope, sir, if honourable members' constituents ask them that question they will find an answer.

The Parliamentary Secretary to the Treasury (Mr. William Whiteley): rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The House divided: Ayes, 232; Noes, 78

Division No. 12.]
AYES.
[11.44 p.m.


Adams, W. T. (Hammersmith, South)
Coldrick, W.
Freeman, Peter (Newport)


Allen, A C. (Bosworth)
Collick, P
Ganley, Mrs. C. S


Allen, Scholefield (Crewe)
Collindridge, F.
Gibbins, J.


Alpass, J. H.
Colman, Miss G. M.
Gibson, C W


Anderson, A. (Motherwell)
Comyns, Dr. L.
Gilzean, A.


Anderson, F. (Whitehaven)
Cooper, Wing-Comdr. G.
Glanville, J. E (Consett)


Attewell, H. C.
Corbet, Mrs. F. K. (Camb'well, N.W)
Goodrich, H E.


Awbery, S. S.
Crossman, R. H. S.
Gordon-Walker, P. C.


Ayrton Gould, Mrs. B
Davies, Ernest (Enfield)
Greenwood, Rt. Hon. A. (Wakefield)


Bacon, Miss A.
Davies, Harold (Leek)
Greenwood, A. W. J. (Heywood)


Baird, J.
Davies, S. O. (Merthyr)
Grey C F


Barton. C.
Deer, G.
Grierson, E.


Bechervaise, A. E.
Delargy, Captain H. J
Guy, W. H.


Benson, G.
Diamond, J.
Haire, John E. (Wycombe)


Bing, G. H. C.
Dobbie, W.
Hale, Leslie


Blackburn, A. R.
Dodds, N. N.
Hardy, E. A.


Blyton, W. R.
Driberg, T. E. N.
Harrison, J.


Boardman, H.
Dumpleton, C. W.
Henderson, A. (Kingswinford)


Bowden, Flg.-Offr H. W.
Edelman, M
Henderson, Joseph (Ardwick)


Bowles, F. G. (Nuneaton)
Edwards, A. (Middlesbrough, E.)
Hewitson, Capt. M


Braddock, Mrs. E M. (L'pl. Exch'ge)
Edwards, John (Blackburn)
Hobson, C. R.


Braddock, T. (Mitcham)
Edwards N. (Caerphilly)
Holman, P.


Brown, George (Belper)
Evans, John (Ogmore)
Holmes, H. E (Hemsworth)


Brown, T. J. (Ince)
Evans, S. N. (Wednesbury)
House, G.


Buchanan. G
Ewart. R
Hudson, J H. (Ealling, W.)


Burke, W. A.
Fairhurst, F.
Hughes, H. D. (W'lverh'pton, W.)


Butler. H W 'Hackney, S.)
Farthing, W. J.
Hutchinson, H L (Rusholme)


Carmichael. James
Fletcher, E. G. M. (Islington, E.)
Irving, W. J.


Champion, A. J.
Foot, M. M.
Janner, B.


Clitherow, Dr R.
Forman, J. C.
Jay, D. P. T.


Cobb, F. A.
Fraser, T. (Hamilton)
Jeger, G. (Winchester)




Jeger, Dr. S W. (St. Pancras. S.E.)
Nally, W.
Steele, T.


John, W.
Nichol, Mrs. M. E. (Bradford, N.J
Stewart, Capt. Michael (Fulham, E.)


Jones, O. T. (Hartlepools)
Nicholls, H. R. (Stratford)
Strauss, G. R. (Lambeth, N.)


Jones, Elwyn (Plaistow)
Noel-Baker, Capt. F. E. (Brentford)
Stubbs, A. E.


Jones, J. H. (Bolton)
O'Brien, T.
Summerskill, Dr. Edith


Jones, P. Asterley (Hitchin)
Oldfield, W. H.
Symonds, A. L.


Keenan, W.
Oliver, G. H.
Taylor, H. B. (Mansfield)


Kenyon, C.
Paget, R. T
Taylor, R. J. (Morpeth)


Kinghorn, Sqn.-Ldr. E.
Pargiter, G. A
Thomas, I. O. (Wrekin)


Kinley, J
Parkin, B. T
Thomas, John R. (Dover)


Kirby, B. V
Paton, Mrs. F. (Rushcliffe)
Thomas, George (Cardiff)


Lang, G.
Paton, J. (Norwich)
Thorneycroft, Harry (Clayton)


Layers, S.
Pearson, A
Thurtle, E.


Lee, F. (Hulme)
Peart, Capt T F
Tiffany, S.


Lee, Miss J. (Cannock)
Perrins, W
Timmons, J.


Lewis, A W J. (Upton)
Piratin, P
Tolley, L.


Lewis, J. (Bolton)
Platts-Mills, J. F. F.
Tomlinson, Rt. Hon. G.


Lewis, T (Southampton)
Poole, Major Cecil (Lichfield)
Ungoed-Thomas, L.


Lindgren, G. S.
Popplewell, E.
Usborne, Henry


Lipton, Lt.-Col. M.
Porter, E. (Warrington)
Vernon, Maj. W. F.


Logan, D. G.
Porter, G. (Leeds)
Viant, S. P.


Longden, F.
Pritt, D. N.
Walkden, E.


Lyne, A. W.
Proctor, W. T.
Walker, G. H.


McAdam, W.
Pursey, Cmdr. H
Wallace, G. D. (Chislehurst)


McGhee, H. G.
Randall, H. E.
Wallace, H. W. (Walthamstow, E.)


McGovern, J.
Ranger, J.
Warbey, W. N.


Mack, J. D.
Rees-Williams, D. R.
Watkins, T. E.


McKay, J. (Wallsend)
Reid. T. (Swindon)
Watson, W. M.


Mackay, R. W. G. (Hull. N.W.)
Rhodes, H.
Weitzman, D.


McKinlay, A. S.
Robens, A.
Wells, W. T. (Walsall)


McLeavy, F.
Rogers, G. H. R.
White, C. F. (Derbyshire, W.)


MacMillan, M. K. (Western Isles)
Royle, G.
White, H. (Derbyshire, N.E.)


Mallalieu, J. P. W.
Scollan, T.
Whiteley, Rt. Hon. W.


Manning, C. (Camberwell, N.)
Segal, Dr. S.
Willey, F. T. (Sunderland)


Marquand, H. A.
Shackleton, Wing-Cdr. E. A. A.
Willey, O. G. (Cleveland)


Marshall, F. (Brightside)
Sharp, Granville
Williams, D. J. (Neath)


Mathers, G.
Shawcross, C. N. (Widnes)
Williams, J. L. (Kelvingrove)


Medland, H. M.
Shurmer, P.
Williams, W. R. (Heston)


Mellish, R. J.
Silverman, J. (Erdington)
Williamson, T.


Middleton, Mrs. L.
Silverman, S. S. (Nelson)
Willis, E.


Mikardo, Ian
Skeffington, A. M.
Wise, Major F. J


Mitchison, Maj. G R
Skinnard, F. W.
Woods, G. S.


Moody, A. S.
Smith, S. H. (Hull, S.W.)
Wyatt, W.


Morgan, Or. H. B
Snow, Capt. J. W.
Yates, V. F.


Morris, P. (Swansea, W.)
Soskice, Maj. Sir F.
Zilliacus, K.


Mort, D. L.
Sparks, J. A.



Moyle, A.
Stamford, W.
TELLERS FOR THE AYES:




Mr. Simmons and Mr. Hannan.




NOES.


Agnew, Cmdr. P. G.
Hinehingbrocke, Viscount
Raikes, H. V.


Aitken, Hon. Max
Hogg, Hon. Q.
Rayner, Brig. R.


Astor, Hon. M.
Howard, Hon. A.
Reed, Sir S. (Aylesbury)


Baldwin, A. E.
Hudson, Rt. Hon. R. S. (Southport)
Ronton, D.


Beechman, N. A.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Roberts, Maj. P. G. (Eoclesall)


Bennett, Sir P.
Keeling, E. H.
Robinson, Wing-Comdr. Roland


Birch, Nigel
Kerr, Sir J. Graham
Scott, Lord W.


Bossom, A. C.
Lambert, Hon. G.
Spearman, A. C. M.


Bowen, R.
Legge-Bourke, Maj. E. A. H.
Spence, H. R.


Boyd-Carpenter, J. A.
Lennox-Beyd, A. T.
Stoddart-Scott, Col. M.


Braithwaite, Lt.-Comdr. J. G.
Lindsay, M. (Solihull)
Strauss, H. G. (English Universities)


Buchan-Hepburn, P. G. T.
Low, Brig. A. R. W.
Thomas, J. P. L. (Hereford)


Challen, C.
Lucas-Tooth, Sir H.
Turton, R. H.


Clifton-Brown, Lt.-Col. G.
MacAndrew, Col. Sir C-
Vane, W. M. F.


Corbett, Lieut.-Col. U. (Ludlow)
MeCallum, Maj. D.
Wadsworth, G.


Crosthwaite-Eyre, Col. O. E.
MoKie, J. H. (Galloway)
Wakefield, Sir W. W.


Crowder, Capt. John E.
Maitland, Comdr. J. W.
Walker-Smith, D.


Davidson, Viscountess
Manningham-Buller, R. E.
Ward, Hon. G. R.


Dodds-Parker, A. D.
Marlowe, A. A. H.
Wheatley, Colonel M. J.


Dugdale, Maj. Sir T. (Richmond)
' Mellor, Sir J.
White, J. B. (Canterbury)


Eccles, D. M.
Morrison, Maj. J. G. (Salisbury)
Williams, C. (Torquay)


Eden, Rt. Hon. A.
Mott-Radclyffe, Maj. C. E.
Willoughby de Eresby, Lord


Foster, J. G. (Northwich)
Neven-Spence, Sir B.
Winterton, Rt. Hon. Earl


Fraser, Sir I. (Lonsdale)
Nicholson, G.
York, C.


Gage, C.
Orr-Ewtng, I. L.



Gomme-Duncan, Col. A. G.
Peto, Brig C. H. M.
TELLERS FOR THE NOES:


Haughton, S. G.
Pitman, I. J
Mr. Drewe and Major Conant

Question put accordingly,
That the Seizure of Food Order, 1946 (S.R. &amp; O., 1946, No. 1823), dated 8th

November, 1946, a copy of which was presented on 13th November, be annulled.

The House divided: Ayes, 77: Noes, 227.

Division No. 13.]
AYES.
[11.54 p.m.


Agnew, Cmdr. P. G.
Gomme-Duncan, Col. A. G.
Pitman, I. J.


Aitken, Hon. Max.
Haughton, S. G.
Raikes, H. V.


Astor, Hon. M.
Hinchingbrooke, Viscount
Reed, Sir S. (Aylesbury)


Baldwin, A. E.
Hogg, Hon. Q. 
Renton, O.


Beechman, N. A.
Howard, Hon. A.
Roberts, Maj. P. G. (Ecelesall)


Bennett, Sir P.
Hudson, Rt. Hon. R. S. (Southport)
Robinson, Wing-Comdr Roland


Birch, Nigel
Hutchison, Lt.-Cm. Clark (E'b'rgh, W.)
Scott, Lord W.


Bossom, A. C.
Keeling, E. H.
Spearman, A. C. M.


Bowen, R.
Kerr, Sir J Graham
Stoddart-Scott. Col. M.


Boyd-Carpenter, J. A.
Lambert, Hon. G.
Strauss, H. G. (English Universities)


Braithwaite, Lt.-Comdr. J. G.
Legge-Bourke, Maj. E. A. H.
Thomas, J. P. L. (Hereford)


Buchan-Hepburn, P. G. T.
Lennox-Boyd, A. T.
Turton, R. H.


Challen, C.
Lindsay, M. (Solihull)
Vane, W. M. F.


Clifton-Brown, Lt.-Col. G.
Low, Brig. A. R. W.
Wadsworth, G.


Conant, Maj. R. J. E.
Lucas-Tooth, Sir H.
Wakefield, Sir W. W.


Corbett, Lieut-Col. U. (Ludlow)
MacAndrew, Col. Sir C.
Walker-Smith, D.


Crosthwaite-Eyre, Col. O. E.
McCallum, Maj. D.
Ward, Hon. G. R.


Crowder, Capt. John E.
McKie, J. H. (Galloway)
Wheatley, Colonel M. J.


Davidson, Viscountess
Maitland, Comdr. J. W.
White, J. B. (Canterbury)


Dodds-Parker, A. D.
Manningham-Buller, R. E.
Williams, C. (Torquay)


Drewe, C.
Marlowe, A. A. H.
Willoughby de Eresby, Lord


Dugdale, Maj. Sir T. (Richmond)
Morrison, Maj. J. G. (Salisbury)
Winterton, Rt. Hon Earl


Eccles, D. M.
Mott-Radclyffe, Maj. C. E.
York, C.


Eden, Rt. Hon. A.
Neven-Spence, Sir B.



Foster, J. G. (Northwich)
Nicholson, G.
TELLERS FOR THE AYES:


Fraser, Sir I. (Lonsdale)
Orr-Ewing, I. L.
Sir John Mellor and Mr. Spence.


Gage, C.
Peto, Brig. C. H. M.





NOES.


Adams, W T. (Hammersmith, South)
Evans, S. N. (Wednesbury)
Lee, Miss J. (Cannock)


Allen, A. C. (Bosworth)
Ewart, R.
Lewis, A. W. J. (Upton)


Allen, Scholefield (Crewe).
Fairhurst, F.
Lewis, J. (Bolton)


Alpass, J. H.
Farthing, W J.
Lewis, T (Southampton)


Anderson, A. (Motherwell)
Fletcher, E. G. M. (Islington, E.)
Lindgren, G. S.


Anderson, F. (Whitehaven)
Foot, M. M.
Lipton, Li.-Col M


Attewell, H C.
Forman, J. C.
Logan, D. G


Awbery, S. S
Fraser, T. (Hamilton)
Longden, F.


Ayrton Gould, Mrs. B.
Freeman, Peter (Newport)
Lyne, A. W.


Bacon, Miss A.
Ganley, Mrs. C S.
McAdara, W


Baird, J.
Gibbins, J.
McGhee, H. G


Barton, C
Gibson, C. W.
McGovern, J.


Bechervaise, A. E
Gilzean, A.
Mack, J. D.


Benson, G.
Glanville, J. E. (Consett)
McKay, J. (Wallsend)


Bing, G. H. C.
Goodrich, H. E.
Mackay, R. W G. (Hull. N.W.)


Blackburn, A. R.
Gordon-Walker, P. C.
McKinlay, A S


Blyton, W. R.
Greenwood, Rt. Hon. A. (Wakefield)
McLeavy, F.


Boardman, H.
Greenwood, A. W. J (Heywood)
MacMillan, M. K. (Western Isles)


Bowden, Flg.-Offr H W.
Grey, C. F.
Mallalieu, J. P W.


Bowles, F G (Nuneaton)
Grierson, E.
Manning, C. (Camberwell, N.)


Braddock, Mrs. E. M. (L'pt, Exch'ge)
Guy, W. H.
Marquand, H. A.


Braddock, I (Mitcham)
Haire, John E (Wycombe)
Marshall, F. (Brightside)


Brown, George (Belper)
Hale, Leslie
Mathers, G.


Brown, T J. (Ince)
Hardy, E. A
Medland, H. M


Buchanan, G
Harrison, J
Mellish, R J


Burke, W A.
Henderson, A. (Kingswinford)
Middleton, Mrs L


Butler, H W. (Hackney. S.)
Henderson, Joseph (Ardwick)
MikardO, Ian


Carmichael, James
Hewitson, Capt. M
Mitchison, Maj. G. R


Champion, A J.
Hobson, C. R
Moody, A. S.


Clitherow, Dr R
Holman P.
Morgan, Dr. H. B.


Cobb, F A.
Holmes, H. E. (Hemsworth)
Morris, P. (Swansea, W.)


Coldrick, W
House, G.
Mort, D L


Collick, P.
Hudson, J. H. (Ealing, W.)
Moyle, A.


Gollindridgs F.
Hughes, H. D. (Wolverhampton. W)
Nally, W.


Colman, Miss G. M
Hutchinson, H. L. (Rusholme)
Nichol, Mrs. M. E (Bradford, N.)


Comyns, Dr. L.
Irving, W. J.
Nicholls, H. R. (Stratford)


Cooper, Wing-Comdr G.
Janner, B,
Noel-Baker, Capt. F. E (Brentford)


Corbet Mrs. F. K. (Camb'wt.'l. N W.)
Jay, D. P. T.
O'Brien, T.


Crossman, R. H S
Jeger, G (Winchester)
Oldneld, W. H


Davies, Ernest (Enfield)
Jeger, Dr. S. W (St. Pancras, S.E.)
Oliver. G H


Davies, Harold (Leek)
John W
Paget, R. T.


Davies, S O (Merthyr)
Jones, D. T. (Hartlepools)
Pargiter, G A.


Deer, G
Jones Elwyn (Plaistow)
Parkin, B. T.


Delargy, Captain H J.
Jones. J H. (Bolton)
Paton, Mrs F (Rushcliffe)


Dobbie, W
Keenan, W.
Paton, J (Norwich)


Dodds, N. N.
Kenyon, C.
Pearson, A


Driberg, T. E N
Kinghorn Sqn.-Ldr. E
Peart, Capt T F


Edelman. M
Kinley, J
Perrins, W


Edwards, A. (Middlesbrough, E.)
Kirby, B. V
Piratin, P.


Edwards, John (Blackburn)
Lang, G.
Platts-Mills. J. F F.


Edwards, N (Caerphilly)
Lavers, S.
Poole, Major Cecil (Lichfield)


Evans, John (Ogmore)
Lee, F. (Hulme)








Porter, E. (Warrington)
Soskice, Maj. Sir F
Wallace, G. D. (Chislehurst)


Porter, G. (Leeds)
Sparks, J. A
Wallace, H. W. (Walthamstow, E.)


Prill, O N.
Stamford, W
Warbey, W. N.


Proctor, W. T.
Steele, T.
Watkins, T E.


Pursey, Cmdr. H
Stewart Capt Michael (Fulham, E.)
Watson, W. M


Randall, H. E
Strauss, G. R. (Lambeth, N.)
Weitzman, D


Ranger, J
Summerskill, Dr Edith
Wells, W. T (Walsall)


Rees-Williams, D. R
Symonds, A L.
White, C F. (Derbyshire, W.)


Reid, T (Swindon)
Taylor, H. B (Mansfield)
White, H. (Derbyshire, N.E.)


Rhodes, H
Taylor, R. J. (Morpeth)
Whiteley, Rt Hon W


Robens, A.
Thomas, I. O (Wrekin)
Willey, O G (Cleveland)


Rogers, G. H. R
Thomas, John R. (Dover)
Williams, D J. (Neath)


Royle, C.
Thomas, George (Cardiff)
Williams, J. L. (Kelvingrove)


Scollan, T
Thorneycroft, Harry (Clayton)
Williams, W. R. (Heston)


Segal, Dr S
Thurtle, E.
Williamson, T


Shackleton, Wing-Cdr. E. A. A
Tiffany, S
Willis, E.


Sharp, Granville
Timmons, J.
Wise, Major F. J


Shawcross, C N. (Widnes)
Tolley, L.
Woods G S


Shurmer, P
Tomlinson, Rt. Hon
Wyatt, W


Silverman, J. (Erdington)
Ungoed'Thomas, L.
Yates. V F


Silverman, S S (Nelson)
Usborne, Henry
Zilliacus, K


Skeffington, A M
Vernon, Maj. W F



Skinnard, F W
Viant, S. P.
TELLERS FOR THE NOES:


Smith, S, H (Hull, S.W)
Walkden, E.
Mr. Simmons and Mr, Hannan


Snow, Capt. J. w
Walker, G. H

ADJOURNMENT.

Resolved:


"That this House do now adjourn."— [Mr. R. I Taylor.]


Adjourned accordingly at One Minute past Twelve o'Clock.